U.S. Economic and Interest Rate Outlook, Depression Avoided but Economy Still Faces Strong Headwinds
Economics / Economic Recovery Sep 15, 2009 - 09:46 PM GMTBy: Paul_L_Kasriel
We have just weathered the longest (19 months?) and deepest recession in the post-WWII era.
In August, the ISM-Mfg. Composite Index popped above 50 for the first time since January 2008.
The behavior of the ISM-Mfg. Index suggests that the recession ended in July 2009.
It is not that any one sector is soaring …
…rather a number of sectors have either stopped descending or are descending at a much slower rate.
Thanks to the sharp decline in home prices and the low level of mortgage rates, house purchases are now much more affordable.
High housing affordability plus the $8K first-time-homebuyer tax credit has resulted in four consecutive monthly increases in home sales.
The sharp decline in the inventory of new homes has led to five consecutive increases in starts of new single-family homes.
Full report continues here... (pdf)
Paul Kasriel is the recipient of the 2006 Lawrence R. Klein Award for Blue Chip Forecasting Accuracy
By Paul L. Kasriel
The Northern Trust Company
Economic Research Department - Daily Global Commentary
Copyright © 2009 Paul Kasriel
Paul joined the economic research unit of The Northern Trust Company in 1986 as Vice President and Economist, being named Senior Vice President and Director of Economic Research in 2000. His economic and interest rate forecasts are used both internally and by clients. The accuracy of the Economic Research Department's forecasts has consistently been highly-ranked in the Blue Chip survey of about 50 forecasters over the years. To that point, Paul received the prestigious 2006 Lawrence R. Klein Award for having the most accurate economic forecast among the Blue Chip survey participants for the years 2002 through 2005.
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
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