A Pre-Election Economic Update
A cold shadow has fallen over America as we enter a new moon phase this Halloween weekend. Election jitters have people drawing the shades and staying close to home. This autumn is more foreboding than most, but rosy economic numbers offer a sharp contrast to our current period of angst and uncertainty.
With today’s news that the real gross domestic product increased at an annual rate of 2.9 percent in the third quarter, there’s no question our economy still has a pulse. In fact, these are the best GDP numbers in two years, partially fueled by a pop in U.S. exports. Business investment is up, as is consumer spending—up 2.1 percent—but slower than the previous quarter’s 4.3 percent increase.
Turning now to housing, during a time when cobwebs cover front porches decorated with ghosts, ghouls, skulls and bats, single-family mortgage delinquency rates have fallen once more. After the sky-is-falling delinquency peak in January 2010, this number has been dropping steadily ever since and is quickly approaching the pre-recession normalcy of just below 1%.
Speaking of trend lines, weekly unemployment claims—a key economic benchmark—have fallen so low you have to go back to the mid-1970s to find numbers this optimistic. According to the Department of Labor, last week’s initial claims of 258,000 suggests few layoffs and further progress in American job growth.
Many prognosticators have suggested a strengthening economy will sway the election, a subject too dark even for this harrowing blog. According to the Pew Research Center, just 36 percent of Republicans and 35 percent of Democrats are satisfied with their choices this November 8. Election Day approaches, just as steadily as the cold, dark winds of winter.
Given the preponderance of good news, many economists predict the Federal Reserve will hike interest rates in December. Depending on your POV, this is either good news, or a sign that no matter how sunny things look, the grim reaper is always lurking around the corner.