The Keystone Pipeline: Dragging on for four years now a decision on the project will not be made any time soon, despite support by a majority in the US Senate where last week 53 members signed a letter urging President Obama to approve the project. Shovel ready jobs…..waiting, waiting….
The Purchasing managers index for the US manufacturing industry increased to 56.1 in January, the highest reading since March 2011 and new orders are at their highest mark since May 2010.
The number of Americans filing for unemployment benefits for the first time fell for the week ending January 19 and are now at their lowest level since January 2008.
Real gross domestic product (GDP) declined at an annual rate of 0.1 percent in the fourth quarter of 2012. GDP grew 2.2 percent in 2012 overall. Crashing from a reported 3 percent rate of growth in the third quarter, this was the worst quarterly performance of the year (and the worst since 2009: Q2).
The bright spot in the GDP numbers was the strong recovery performance of the housing sector, which now has legs and is almost a given to be the best performing area of the economy on 2013. The trickle down effect for manufacturing and metals should be significant.
The government sector subtracted 1.3 percentage points off Q4 GDP growth. Our massive budget deficits preclude new spending initiatives, the resolution of the “sequestration” will likely result in more spending cuts. Fiscal drag will be with us for years, a decade or more. Pull up your boots.
We all know that consumer spending is the nourishment our economy needs to grow. Upside of motor vehicle sales, household buying still lags. Why? The lack of solid job creation resulting in poor income generation.
What toll has the Washington politics taken on the economy? Companies pulled in their horns in late 2012, reining in new inventory investments as the year closed and the Fiscal Cliff approached. And yet, it is still not resolved, causing substantial economic and business uncertainties to linger on.
From the Chicago Fed: The Midwest Economy Index (MEI) increased in December from November but remained negative for the sixth consecutive month.
What a mixed bag of data! We have to keep an eye on GDP going forward but personally, based on a continual review of data, I believe we have a year of slow to modest growth ahead of us. They(the adminstration) want us to believe that 2.0 or 2.5 percent growth is the new normal. Hogwash. It may be; when our legislators continue to overspend, over regulate and over tax the private sector. But the private sector is where real job creation occurs. My dad used to say “you can’t kill the golden goose.” The US economy is our golden goose, when markets are free to operate, prosperity reigns-opportunities to succeed are abundant and the goose continues to lay “golden eggs”. When markets are not free but burdened and restrained by over taxation, over regulation and a lack of good policy, the golden goose stops laying those eggs. Then, everyone suffers-except the politicians.
God bless America
