We don't know much about fiscal policy and economics so we're easily led on these matters. In fact we've been wringing our hands for the last four or five years as one economic poobah after another has proclaimed the economy to be teetering on the brink of recession. Then we get all confused when the numbers come out for the most recent quarter and invariably they show an economy that's as robust and healthy as anyone could reasonably hope for.
For example, Larry Kudlow, writing at National Review Online, tells us that:
Americans are working. The 4.7 percent unemployment number remains at an historical low. On a three-month rolling basis, the U.S. economy has added over 100,000 jobs. Meanwhile, the household job count shows that an average of 303,000 jobs have been added in the last three months. This is noteworthy because it suggests that the job market is turning around.
Hours worked are growing more than 1-percent annually, while workers' wages are running 3.8 percent, a full percentage point ahead of inflation. As for this week's productivity report, it was nothing short of spectacular: the 6.3 percent productivity gain was the best in four years. A rise in productivity is good for growth. It's good for profits. And it's good for low inflation.
Speaking of inflation, business inflation is down from 3.5 percent just over a year ago to 1.5 percent today. Meanwhile, oil prices have retreated to $88. And, to top it all off, last night we received a tremendous new number showing household net wealth has headed even higher. It stands at a record $59 trillion dollars. That's more than seven percent above a year ago.
Another factoid worth considering is that mortgage refinancings are soaring at lower rates. Since June, they are up nearly 70 percent, while mortgage rates on 15 and 30-year loans are down nearly a 100 basis points. That is a very positive, very welcome development that ought to cushion the plunge in home sales, and maybe even prices.
This just doesn't sound to our untutored ear like the beginnings of a recession, but then we're not beset with Bush Derangement Syndrome. If we were, then facts like these wouldn't matter. BDS sufferers are convinced that the economy can't be good because Bush is stupid, or something like that. Anyway, the numbers look pretty good to us, and we're beginning to wonder if waiting for the recession isn't a bit like waiting for Godot in Samuel Beckett's play. The actors expect Godot's arrival at any minute but for some reason Godot never comes.
RLC