Economy springs forward?
Charleston gardeners are understandably confused. The azaleas are already out while the camellias still are blooming. And the bearded iris is coming along, a more traditional prognosticator of spring.
But while similarly confusing indicators cloud the national economy, there are hopeful rays of marketplace sunshine breaking through.
Yes, the persisting failure of elected officials in Washington to exercise fiscal responsibility, most recently demonstrated last week when they missed the deadline to avert sequestered budget cuts, remains troubling.
And the up-and-down recovery so far has taken more than twice as long as the average. The nation has 3 million fewer jobs today than it did when the recession started in 2008.
Yet there are encouraging signs of renewal. House prices are now moving up smartly, the stock market is reaching record highs, the unemployment rate has fallen slightly and other leading indicators of economic growth are also looking up. House prices across the nation have improved by almost 6 percent on average over the past year, according to indices compiled by the Federal Housing Finance Agency, Standard & Poor’s and Core-Logic.
Even more encouraging is the consensus finding that the biggest housing comebacks in the past year have come in locations that had experienced the largest price drops and most foreclosures during the recession. Prices were up by more than 20 percent in Phoenix. Las Vegas, San Francisco, San Diego, Los Angeles, Miami and Tampa showed strong gains well above the national average, too.
And the Charleston area housing market, which had already weathered the industry storm much better than most of the nation, is on an upbeat trend, too.
Rising home prices are a prerequisite for rising consumer confidence. Retailers and manufacturers look at consumer confidence levels in calculating how much to buy and how much to invest.
Now the outlook is more promising than it’s been in five years. Record highs in the stock market this week reflect investors’ enthusiasm — and should be a reliable indicator of coming economic growth during the second half of 2013.
Meanwhile, unemployment fell from 7.8 percent in January to 7.7 percent in February. That’s still too high — and still lower than it would be if far too many Americans hadn’t dropped out of the workforce over the last five years. The civilian labor force participation rate — the percent of the working-age population that is employed or seeking employment — in February was 63.5 percent, the lowest level in 34 years.
So the economy still has a long way to go. Even with last year’s positive gains, national average housing prices have barely recovered to their 2004 levels, while gross national product has only just surpassed its 2008 level.
However, an ample amount if unused capacity offers fertile ground for stronger growth.
And if elected officials in Washington can finally get their fiscal act together, the American economy could finally break into a much fuller bloom this spring.