The signs that the economy is gaining upward momentum are multiplying. While no one should say that all the danger is past, investors seem to be shedding their worries about a faltering economy or even a double dip recession.
For example, the stock market is up some 79% since its March low of last year. The economy grew at a 5.6% annualized rate in the fourth quarter of 2009. Consumer spending is up 5 months in a row. The U.S. manufacturing sector has expanded for eight straight months. In March the economy added 162,000 jobs–more than it had during any month in the past three years. Even the battered auto market is turning up. Little wonder many Wall Street economists are upping their growth forecasts for 2010.
The March surge in new home sales announced this morning fits in with the story of a stronger economy. Sales of new homes surged 27 percent in March. That was the biggest gain in 47 years.
Impressive, no? Well, not quite. Take a look at this chart.
Fact is, new home sales hit a record low in February. So a 27% bounce off that depressed level isn’t as striking as the headlines suggest. I’m not discounting the direction–the numbers are increasingly positive. But looking at the graphic it seems to me it’s more a story of a market reaching bottom than of a market heading up. its going to take a long time for housing to come back after the debacle of recent years.
Putting the latest figures in a chart is easy to do if you’d like. One way to do it is to go to the website economagic.com. Click on the series you’re interested in. And then you have a set of choices to create a GIF chart, a PDF, and so on. You can play with the dates and percentages, too. It’s easy. It’s fun. Sometimes a picture is worth several hundred words.