Economic Forecasts Too Rosy?
The last few weeks have been ripe with claims that the U.S. economy is recovering. Pointing primarily at consumer sentiment and holiday spending, analysts expected that the outlook for America could only improve from here.
Unfortunately, the numbers don’t add up:
- Gallup’s economic confidence index is at -31, well below its 52 week low
- February orders for U.S. durable goods dropped almost a full percentage point just after having risen an adjusted 3.6% in January
- February existing home sales dropped to the lowest rate in decades which drove housing prices even lower.
- Oil is still on the rise. Crude for May delivery was touching $106.00 per barrel and going up.
While the most recent report on first time unemployment filings dropped to 382,000, it is unknown how much of this is due to actual increases in hiring or job seekers just giving up.
So while the Federal Reserve may be talking up an improving economy, take it with a grain of salt – Bernanke was saying even rosier things all the way back in 2009.
“Consumer spending, which dropped sharply in the second half of last year, grew in the first quarter,” Bernanke said in congressional testimony May 5. “In coming months, households’ spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment.”
Who would have thought that by “months” he meant like 26 or 30 of them?