On several fronts, analysts surprised by U.S. recovery
- October 13, 2012 - 5:35 PM
It isn't only the federal government's Bureau of Labor Statistics that is issuing surprisingly good news about the U.S. economy these days.
If former General Electric Co. CEO Jack Welch's charges of a political fix to manipulate economic data ahead of the presidential election are true, there must be a vast econometric conspiracy embracing auto dealers, real estate agents and the Federal Reserve.
The economy is improving more than professional forecasters anticipated, particularly in data on employment and housing, according to the Bloomberg Economic Surprise Index, which compares 38 indicators with analysts' predictions.
"The economy is improving, and the labor market is getting better," said Robert Brusca, president of Fact & Opinion Economics and a former New York Fed economist. "These numbers are what they are, they're not being slanted. On a scale of one to 10, the economy is at a fairly firm six and may be heading higher."
An Oct. 5 report from the BLS showed the jobless rate fell in September to 7.8 percent, the lowest since Obama took office in January 2009, from 8.1 percent in August. The rate was forecast to rise to 8.2 percent, according to the median estimate in a Bloomberg survey of 88 economists.
Among other indicators that have exceeded analysts' forecasts: consumer confidence, car sales and purchases of existing homes.
Sales of previously owned houses rose 7.8 percent in August to a two-year high. Cars sold at a 14.9 million annual rate in September, the fastest pace since 2008.
"The economy is doing better than people think," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Among the headwinds to growth, Rupkey said, are the European debt crisis, a slowdown in China and the so-called fiscal cliff, more than $600 billion of tax increases and spending cuts that will take effect early next year unless Congress acts to forestall them.
© 2014 Star Tribune