Economic Positives
1. The U.S. Leading Indicator is positive.
2. Interest rates are stimulative.
3. The money supply is expanding.
4. Retail sales are experiencing a normal seasonal rise.
5. Jobs are being created, though not at a fast pace; nevertheless, job creation is still job creation and leads to more retail spending, tax payments, mortgage payments, etc.
6. Banks are lending at above-year-ago levels.
7. Exports are up.
8. The businesses we talk to are doing very well. (We admit this is a biased base of ITR clients, but it does show that being proactive is important).
9. Some portions of the President’s job creation plan will help boost the economy if enacted by Congress.
10. Business-to-business activity is still rising at better-than-year-ago levels.
Economic Negatives
1. The Purchasing Managers Index is moving lower (though still above 50).
2. Consumer Confidence is weak. Disregard this because we are still spending, so we must be spending with no confidence. Spending is the important part of the equation.
3. Uncertainty in Europe is high. This is very true, but uncertainty is a long way from a sure signal of recession. It is more likely that the debt problems will be temporarily resolved.
4. Inventories are up. True, but orders are rising too.
5. Construction markets have not yet begun to recover. Yes, but they are also no longer declining.
6. The U.S. dollar is weak. A weak dollar will help exporters through the short term, especially in light of escalating costs in China.
