Don’t Believe the Hype: The Economy is Improving
That’s according to economic data and surveys released this week. The Institute for Supply Management’s indexes, released earlier this week, show both the manufacturing and non-manufacturing sectors showing solid expansion. The reports show new orders and production were both strong.
On Tuesday, auto manufacturers reported unit auto sales for November of 17.2 million, the second highest in the last nine years. And on Wednesday, the Commerce Department revised upward its productivity numbers for the third quarter, an important long-run measure for the economy, said Bob Hughes, senior research fellow at the American Institute for Economic Research.
“These are all very good signs that the economy has been growing at a reasonably healthy pace,” Hughes said. The Fed reflected this optimism in its Beige Book, released on Wednesday. The one soft number, Hughes noted, was ADP’s estimate of private payrolls, released on Wednesday, which was lower than the consensus of analyst predictions.
Put all that together, Hughes said, and it paints a picture of an economy that is doing reasonably well. “We’re not so boom-and-bust right now. Growth is reasonably healthy, job gains are there, inflation is low but not so low we’re really worried about inflation. It’s really a pretty nice mix right now,” Hughes said.