About the economy: what is working for and against the needed recovery.

Economic News from Bloomberg and others

Indicators for an improving economy:

• The index of U.S. leading indicators climbed more than forecast in October, signaling the world’s largest economy will keep growing in early 2012. .
• The U.S. economy may end 2011 growing at its fastest clip in 18 months as analysts increase their forecasts for the fourth quarter just a few months after a slowdown raised concern among investors.

• Copper prices continue to rise; an indicator that manufacturing is gearing up for increased production.
• GDP grew 2.5% over an anemic 2nd quarter.
• The holiday season is upon us; a good time for economic growth. The more important concern has to do with the weeks and months after the winter buying season is over.
  

Indicators working against a vibrant recovery:

• Three years of GDP growth at 0% or less, including the first two quarters of this year.
  
• Big Business's refusal to invest or spend the 3 trillion is operating cash it has on hand.
• The Dodd/Frank fin/reg legislation of 2010. This bill is law, but its components have not be fully written and will not be completed for another 18 months. Big business currently spends 1.3 trillion dollars in compliance expense. It is believed that another 1.5 trillion in costs will be the end game of these several thousand new regulations.
  
• Europe - one word for, perhaps, the biggest negative influence of all.
  
• The over-supply of homes in this country, preventing a timely and substantial increase in new home construction. The economy is in for continuing hard times until the existing housing inventory is reduced and new construction begins on a large scale. It is believed that the unemployment rate cannot come down into the 7% bracket without the resurgence of this private sector category.
  
• The continuing mortgage crisis: bankruptcies continue at a record clip, Nearly 15% of all existing homes are vacant, due to this particular crisis. This figures into the existing inventory that needs to be sharply reduced.
• Increasing crude oil prices. Currently at $103, we all know what happens when crude gets to $140 a barrel. Understand that Obama is doing nothing to keep this price down -- as a matter of [his] policy. Market pressure is the only thing keeping this pricing issue "under control."
• Inflation: you should know that the Federal government no longer counts transportation and home heating fuel into its estimate on "inflation." Nor does it count increased food prices. Incredible but true. The Feds can manipulate the reporting all it wants; it cannot manipulate the growing impact of the reality of inflation. To pretend that fuel and food are not considered as indicators of the health of our economy is preposterous, bordering on the criminal.