Editor’s Note: We all love reading articles like this that suggest the economic recovery is at hand. However, think of this sentence buried in the text as the disclaimer: “…the government’s stimulus spending already had its biggest impact and probably wouldn’t contribute to significant growth next year.” We will survive this financial crisis by being realists, not misguided idealists seeking short-term fixes.
From the Associated Press
(The Los Angeles Times) New York – Hopes for the fledgling economic recovery got a boost today from better-than-expected news on manufacturing, construction and contracts to buy homes.
U.S. manufacturing activity grew in October at the fastest pace in more than three years, according to a private group’s measure. It was driven by government spending, businesses’ need to rebuild their inventories and higher demand from overseas.
The Commerce Department said construction spending rose in September on the strength of home building. The report supported optimism that the ailing housing sector is starting to revive.
And the number of signed contracts to buy previously occupied homes rose for the eighth straight month in September, according to the National Association of Realtors.
The trio of positive reports about areas of the economy that could help power a recovery drove Wall Street higher in midday trading. The Dow Jones industrials added about 115 points, and broader indexes also rose.
Still, with jobs scarce, lending tight and consumers wary of spending, it’s unclear whether the strength can be sustained as government stimulus programs wind down. For example, the contracts to buy homes rose as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month. Congress is moving to extend the credit until April 30.
Christina Romer, who heads the president’s Council of Economic Advisers, last week said the government’s stimulus spending already had its biggest impact and probably wouldn’t contribute to significant growth next year.
