Tuesday, November 29, 2005

How can Americans think the economy is strong and weak at the same time?

Just take a look at the info here

Nov. 29 (Bloomberg) -- New reports on U.S. consumer confidence, new home sales and durable goods orders depicted an even more buoyant economy than some analysts previously thought.

The Conference Board, a New York-based research group, said its consumer confidence index rose to 98.9 [was predicted at 90.0] this month from 85.2, the biggest rise in more than two years. Purchases of new homes unexpectedly jumped to a record last month [predicted 1.2mm, actual 1.42mm] and orders for long- lasting equipment, such as aircraft and machinery, rose twice as much as forecast [predicted 1.8, actual 3.4], according to Commerce Department data.

``Coming after the energy shocks and Katrina, it's a remarkable spring-back,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Inc. in New York. ``The economy seems to have an underlying resilience.''

Declining fuel prices from a record a couple months ago are boosting confidence and spending, bolstering expectations for economic growth this quarter. Shoppers splurged over the Thanksgiving weekend at discount retailers such as Wal-Mart Stores Inc. U.S. Treasury securities fell and stocks rose after the reports signaled a pickup in economic growth.

The statistics fly in the face of polls showing many Americans say the economy is in recession. A survey by the Manchester, New Hampshire-based American Research Group found that 43 percent of those questioned said the economy was in a recession, while 44 percent said it wasn't.

Sixty-two percent said they disapprove of the way President George W. Bush is handling the economy, according to the poll of 1,100 adults conducted between Nov. 19-22.


Here's the expanded poll data Bloomberg was citing, but I just don't get it. Yeah, I pay close attention to what's going on, but I don't see how people can believe the economy can be that bad. And that Dubya is making it worse is very difficult to believe. I've always believed president's in general have very little that they can actually do to affect the economy, but it is easier for him to institute policies to make things worse rather than better, at least short term.

Come on people, it's Christmas. Sales are going to jump, oil prices are gradually moving down, which will make travel and heating your home a little cheaper, and lower taxes plus lower gas prices mean more immediate money in the pockets of people. It's not as bad as you all seem to think.

UPDATE: For all matters economic I turn to Lawrence Kudlow.