First-quarter inventories shrank. Necessary to increase output from recession lows.
New-unemployment claims have stabilized. But they are still high.
Federal Reserve interest rates were reduced essentially to zero. This is reducing interest rates available to consumers. Large corporations are still having some trouble.
Chrysler and General Motors appear to be headed for bankruptcy. These could be positive developments--since the slide will stop soon thereafter.
Stock market, up 19% in 18 days, in March. This looks like a harbinger: Stock markets are, historically, strong leading indicators of the economy.
All of these are or are expected to be positive improvements in the trend data. But other trends are still down.
Our financial system is still dysfunctional; until it is regulated and its managers become optimistic, money flow will remain at recession levels.
The US auto industry is in convulsions with both GM and Chrysler on the edge; bank bad loans are still rising. The very volatility of the stock market itself may be a note of warning.
Indicators turning positive carry risks--they could lull a Democratic Congress to the point where it stops doing what is necessary to complete a real turn around. Premature exuberance could be very dangerous indeed. So far, we see a Democratic Congress divided. It thinks it has done enough. Or is it still in the grips of special interests who want things to get worse for reasons of their own? We can only wait and see.
Posted by RoadToPeace on Sunday, April 05, 2009.