The Good News Economist

Gates Foundation Gives Teachers a $335M Raise

good.news.econ@gmail.com (Eldon Mast) — Sat, 21 Nov 2009 03:09:00 +0000

The Bill and Melinda Gates foundation announced this week that it will grant one of the largest privately sponsored school improvement programs in recent memory -- several teacher performance improvement initiatives in more than four states.

The program will focus on efforts to improve teacher's results rather than simply compensate them on "educational qualifications."

Announced on Thursday, the $335 million investment will benefit teacher effectiveness, funding experiments in tenure, evaluation, compensation, training and mentoring in several large school districts and a handful of charter schools.

The area schools receiving the most funding include:
- Hillsborough County Florida schools from the Tampa area: $100 million;
- Memphis Tennessee schools: $90 million;
- Pittsburgh, Pennsylvania schools: $40 million;
- Five charter school networks in Los Angeles, California: $60 million.

The awards will help revamp systems and reward teachers based on student results. For instance in the Hillsborough system, the award there will help administrators revamp teacher annual reviews so that student performance accounts for 40 percent of the educators' reviews instead of the current 7 percent contribution.

The initiatives are proving that it isn't just about single student tests, but facilitating multiple ways to evaluate student and teacher performance.

Federal stimulus dollars are also in play. A $4.35 billion school-reform grant competition also stresses teacher effectiveness coupled with student achievement. The Gates foundation award is striving to help states fund the preparation of applications for those larger Federal grant awards.

On Thursday Ms. Gates said, "We have been in this work for almost a decade now and we've learned a lot about what works. . . . Let's focus on the thing that actually matters the most, which is the teacher."

More Convincing Reports Forecast A Jobs Rebound

good.news.econ@gmail.com (Eldon Mast) — Fri, 20 Nov 2009 02:49:00 +0000

This week saw addition signs that this recovery will be anything but a jobless one.

On Monday the Empire State Manufacturing Survey was released. Amidst a report that shows continued manufacturing growth in the region came this assessment from the document: "Future indexes conveyed an expectation that activity and employment would improve in the months ahead and that both input and selling prices would increase significantly."

Also on Monday, UPS announced that it will hire up to 50,000 temporary workers this season to handle increased holiday shipping activity. Shipments are up this year over next and temporary hiring levels are back to those of the 2007 holiday needs.

On Thursday the Philadelphia Federal reserve released its business outlook survey. It's report proclaimed that: "the overall level of employment was mostly steady this month, and the average work hours index was positive for the first time in more than two years."

Also the government released its jobless claims report for the Nov 14 week. It showed that the four-week average of initial claims for unemployment fell 6,500 to 514,000, down for the 11th straight week.

These four reports are yet more data to support the claim of jobs growth by Christmas-time.

Lowe's Co: ""We Certainly Do Feel Better..."

good.news.econ@gmail.com (Eldon Mast) — Thu, 19 Nov 2009 03:46:00 +0000

Earlier in the week, Lowe's Cos. (LOW) said in the third quarter it saw improved sales in several major big-ticket categories, including major appliances and flooring projects.

Same-store-sales declines for Lowe's progressively moderated as Q3 advanced, with October same-store sales only dropping 5.6%, following a 7.9% decline in September and an 8.7% drop in August. For the full quarter, same-store sales fell 7.5%, an improvement over the second-quarter's 9.5% decline.

The firm sees inventory in better shape than a year ago and also sees signs that consumers are responding to good deals and promotions -- underscoring the firm's optimism.

"We certainly do feel better about how things are trending," CFO Robert Hull said.

Lowe's Chairman and Chief Executive Robert Niblock said appliances, flooring and interior paint posted same-store sales increases. A recent consumer survey found that flooring projects as well as kitchen and bath face-lifts are at the top of consumers' lists of planned home improvement projects.

"The fact that these types of projects are at the top of homeowners' to-do lists is encouraging," Niblock said.

The Good News Economist Blog Turns One

good.news.econ@gmail.com (Eldon Mast) — Wed, 18 Nov 2009 04:52:00 +0000

What a year it has been. Today marks the one year anniversary of the Good News Economist Blog. And it truly has been all about you -- the reader.

With nearly 250 positive stories, collectively you've read over 150,000 pages of good news in the last 12 months -- amidst the constant drumbeat of gloom and doom elsewhere.

Based on your reading interest, here are this year's, top 10 stories:

1. Recession is Over: Positive Economic Data Abounds 3458 pageviews

2. Confidence Spike: Consumers, Small Business, Builders, Investors 3408 pageviews

3. Taxpayers Earn 23% Return on Goldman TARP Investment 3384 pageviews

4. Newton's Third Law and Dow's Epic Rise 3378 pageviews

5. Unemployment Falls in 16 States; Steady in 7 Others 3336 pageviews

6. Is GM's Money-Back Guarantee Good News? 3350 pageviews

7. US Consumer Sentiment Continues To Improve 3252 pageviews

8. Q2 2009 Earnings Results Continue to Impress 3206 pageviews

9. Cash for Clunkers Kicks New Car Sales into High Gear 3157 pageviews

10. Investor Confidence Surges to Five Year High 3141 pageviews

So Happy Birthday to you. Keep reading and commenting. Another 12 months of good news is on its way.

UPS and Fedex Need 64,000 Holiday Workers

good.news.econ@gmail.com (Eldon Mast) — Tue, 17 Nov 2009 06:30:00 +0000

On Monday UPS announced that its projections show it will handle more parcel deliveries this holiday season than it did last year.

UPS will deliver about 400 million packages worldwide between Thanksgiving and Christmas.

Further UPS announced that it will hire 50,000 temporary workers to handle the greater volume.

Last week FedEx also reported that it anticipates shipping more this year.

FedEx said it will hire 14,000 additional part-time and temporary holiday workers.

Both UPS and FedEx are considered indicators of U.S. economic activity because their business booms and cools with the broader economy.

Post recession, labor markets usually improve first by showing a significant pickup in temporary labor, followed shortly thereafter by a return to full-time job growth.

This time is no different.

Add Japan to the Q3 Growth Column

good.news.econ@gmail.com (Eldon Mast) — Mon, 16 Nov 2009 03:56:00 +0000

Rapidly growing neighbors as well as government stimulus programs helped Japan return to growth much more quickly than any had expected. Japan's Q3 growth surged sharply at a 4.8% annualized clip. It was Japan's second consecutive quarter of growth -- accelerating from the 2.7% annualized rate of Q2.

The good news for Japan early Monday comes on the heals of solid growth reports from the U.S. and Europe where GDPs have also started expanding again. Japan's report adds additional creditably to the notion suggesting a broad global recovery is solidly under way.

The news will likely add fresh rally fuel to Wall Street for its open on Monday as Y/Y stock market gains continue to shine.

Year Over Year Market Gains Shine Bright

good.news.econ@gmail.com (Eldon Mast) — Sun, 15 Nov 2009 05:07:00 +0000

Even though markets were sliding rapidly last year at this time, the stock market indexes have now recovered to the point that year over year gains are quite substantial.

For the Dow Jones industrial average, the one year gain is now 1,773 points, up 21% from a year ago at this time:

The S&P500 Index is up 220 points or 25% since it's pre-Thanksgiving 2008 level:

And the technology laden Nasdaq has had the best year of the three, rising 651 points, up an impressive 43% from a year ago at this time:

And you might remember that back in early March we speculated that these charts would look very similar to the charts for 1975. And indeed they do.

Foreclosure Rates Continue Steady Decline

good.news.econ@gmail.com (Eldon Mast) — Thu, 12 Nov 2009 06:16:00 +0000

In October the number of U.S. properties for which a foreclosure filing was received declined for the third month sequentially according to a RealtyTrac report released on Wednesday. The report is a further indication that foreclosures are beginning to subside and that the housing sector is stabilizing.

According to the report, total foreclosure filings in October dropped 3.3% from September.

Several foreclosure-laden states are seeing glimmers of hope in the October data. Nevada -- one of the hardest hit states in terms of foreclosures in the past year -- saw filings actually fall 4% from a year ago, the first ever year-over-year decline in the state since RealtyTrac began recording their foreclosure statistics in 2006. Florida also saw a 4% drop -- also the first year-over-year decline in that state since July 2006.

Wednesday's positive foreclosure news is yet one more result of the improving housing sector.

Housing Outlook Improves - Local Media Agrees

good.news.econ@gmail.com (Eldon Mast) — Wed, 11 Nov 2009 03:10:00 +0000

Sales of previously owned homes rose across the country during the third quarter, according to a report released Tuesday by the National Association of Realtors.

Nationally, sales were up 5.9 percent from the third quarter of last year. Previously owned homes changed hands at a seasonally adjusted annual rate of 5.3 million, according to the report. NAR attributed much of the jump to continued affordable prices and a federal income tax credit. Congress and President Obama legislated an extension and expansion of the tax credit program last week.

Home sales rose in 32 states and Washington, D.C., from the third quarter of 2008 to the third quarter this year. Sales jumped in 45 states, and in Washington, D.C., from the second to the third quarter.

There was no lack of media enthusiasm for the news on Tuesday as local media outlets across the country finally picked up on the good news...

1. Home sales up nearly 79.6% in October in Orlando

2. Pittsburgh home prices rise in third quarter

3. US Home Sales Rise to Two-Year High

4. Home prices seen stabilizing in North Jersey

5. NJ homes sales jump 11 percent in quarter

6. DC Area housing sales jump

7. Las Vegas Home Sales On The Rise

8. Florida home sales up for fifth straight quarter

9. Houston-area home prices rise in third quarter

10. Ohio home sales rose during the third quarter

11. Nashville home sales climb first time in three years

12. Lehigh Valley home sales rise 30 percent in October

13. Illinois Third Quarter Home Sales a Bright Spot in 2009

14. Home Prices Are Suddenly Hot in Some Areas...

Back in June we pointed out a dozen housing markets that were showing pricing improvement. August revealed a dozen more.

While some year over year comparisons continue to show price erosion recent jumps in the national S&P/Case-Shiller Home Price Index further clarifies that the price drops of the past few years are now over. The 20-city index is now consistently rising quarter-over-quarter.

Three independent sources, the National Association of Realtors, the Federal Housing Finance Agency and Case Shiller are now all showing housing price improvement.

Repeatedly we've said that the strength of this recovery will be measured in part by how well the housing industry fares. Tuesday was further strong evidence that this recovery continues unabated.

US Job Growth Likely By Christmas

good.news.econ@gmail.com (Eldon Mast) — Sun, 08 Nov 2009 06:07:00 +0000

Now that the US recovery is in full swing, many continue to asked "when will this newfound economic growth produce new jobs?"

This past week all eyes were on job numbers. And there were some encouraging signs.

First, Challenger, Gray & Christmas, Inc. announced on Wednesday that planned layoffs at U.S. firms fell for a third straight month in October to a 19-month low. Announced job cut rates are now at levels that are below average.

Then on Thursday Monster's employment index was reported to rise an additional point in October to 120 indicating an ongoing improvement in job demand. The Monster Employment Index is a comprehensive monthly analysis of U.S. online job demand.

And finally, initial jobless claims are clearly on the decline, down 20,000 in the Oct. 31 week to 512,000 (prior week revised 2,000 higher to 532,000). The four-week average is down for the ninth straight week, 3,000 lower at 523,750 for a 25,000 decrease from late September.

So just when will this strong recovery start producing new jobs?

The answer is likely found in the significant decline in the number of jobs lost since March. As can be seen from the linear trending in the chart below, if the current economic climate stays intact, it is quite likely that we will actually see job growth starting sometime in December.

Weekend Good News Wrapup

good.news.econ@gmail.com (Eldon Mast) — Sat, 07 Nov 2009 06:18:00 +0000

Cisco Joins Many Others: Recovery Is Gaining Momentum
Posted: Fri, 06 Nov 2009 03:44:00 +0000
John Chambers ignited markets on Thursday. The Cisco CEO joined other leading firms like Apple, Amazon, Alcoa, Intel, and others by stating that, "the quarter was very strong. The recovery is gaining momentum." Earlier in the week, the institute for supply management speculated that the US GDP is likely now growing at an annualized rate of 4.5%.

Chambers continued, "what we saw is a clear tipping point as our business continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times."

Elsewhere on Thursday the US Labor Department said the output per hour of nonfarm workers rose at an annual rate of 9.5% in the quarter, more than four times the average productivity growth rate of the past quarter-century. When taken together with the second quarter's 6.9% rise, it was the strongest productivity growth rate over a six-month period since 1961.

While unemployment remains high, initial claims for unemployment continue to fall and corporate profits have bounced back significantly from the strong downturn in Q1. As output keeps climbing, employment gains will follow shortly.

Such large productivity gains are quite common at the end of deep recessions and the beginning of recoveries. A healthy pattern is that productivity grows first, then employment rises, and finally wages increase.

It continues to be clear that this recovery will not be a jobless one. In fact on Thursday the government also reported that jobless claims dropped to a 10-month low raising speculation that the national unemployment rate has peaked will begin to fall as soon as next month.

Employment gains have already sparked reasons for optimism in many states.

As jobless rates continue to decrease nationally, almost all economic indicators will have turned positive:leading, coincident and lagging.

And as we've published here since February (and as was witnessed on Thursday), the stock market will continue its move -- swift and steep.

Feel free to repost this story on your favorite social network...
Announced Job Cuts Are Now At Below Average Levels
Posted: Thu, 05 Nov 2009 07:00:00 +0000
Challenger, Gray & Christmas, Inc. announced on Wednesday that planned layoffs at U.S. firms fell for a third straight month in October to a 19-month low.

As we've noted the labor market is continuing to improve as US economic activity rebounds.

Planned job cuts announced by U.S. employers fell to 55,679 in October, down 16 percent from 66,404 in September.

The October job cuts represent the lowest level since March 2008, and are now at or below levels that were normally seen throughout all of 2006 and 2007.

In fact at a 55,679 monthly rate, the cuts are now well below the monthly average cuts for the last three years.

The Challenger report is one more indication that a return to US job growth is just around the corner.
Feel free to repost this story on your favorite social network...
Auto Sales Cruise Ahead in October
Posted: Wed, 04 Nov 2009 02:40:00 +0000
On Tuesday major auto manufacturers indicated that their October sales rebounded significantly following a weak September.

The increase to the US annualized sales rate was nearly 20 percent better than September's measure. Early estimates show the bump adding $5 billion, or roughly 1.5% to October's retail sales numbers versus September's readings.

It now appears as though consumers no longer needed cash-for-clunker rebates to commit to new auto acquisitions in October.

GM, Ford and Nissan all reported that their sales are now up from a year ago.

Jessica Caldwell, senior analyst at auto industry tracker Edmunds.com said, "We are trending in the right direction," and "it should be easier for auto companies to report year-over-year growth from this point on."

Ford -- which reported a strong profit on Monday -- claims that increased production in October will help to replenish diminished supplies on dealer lots. Further, Ford sales management points to strong restocking demand through the end of 2009.
Feel free to repost this story on your favorite social network...
US Growth Probably Now at 4.5 percent
Posted: Tue, 03 Nov 2009 01:32:00 +0000
The economy continues to rebuild itself and the manufacturing sector has now grown for three consecutive months. According to the Institute for Supply Management, their PMI registered 55.7 percent. That is 3.1 percentage points higher than the 52.6 percent reported in September. It was the highest reading for the index in over 3 years and manufacturing output month over month rose at the fastest pace in 63 months.

This year, the PMI has correlated extremely accurately with the growth in the overall economy. When annualized the current reading corresponds to a 4.5 percent GDP growth rate.

In more good news on Monday, the National Association of Realtors said its Pending Home Sales Index, rose 6.1 percent -- the index is now at its highest level in nearly three years.

An additional report from the US Commerce Dept showed that U.S. construction spending made its largest gain in a year in September. The report reflected a huge increase in private residential building -- the largest increase in more than six years.

In continued positive earnings news: For the first nine months of the year, Ford has now posted a $1.8-billion profit. That’s a $10.6-billion improvement from the same period a year ago. Surprisingly, Ford said that even without Clunkermania, it would have showed a profit. Further, Ford said it “expects to be solidly profitable in 2011, with positive operating-related cash flow.”

On the jobs front, the ISM's Employment Index registered 53.1 percent in October, which is 6.9 percentage points above the reading reported in September. This indicates the first month of growth in US manufacturing employment in over a year. Eight of the ISM's 18 manufacturing industries surveyed reported growth in employment in October.

To recap, the overall economy is now growing robustly, the housing market continues to recover steadily, earnings news continues to be extremely positive, and it now appears that we've seen the early concrete indications of employment growth.

While there continues to be fallout from the deep recession earlier in the year, it is becoming clearer by the day that upward economic momentum will persist and that this will not be a jobless recovery.
Feel free to repost this story on your favorite social network...

Cisco Joins Many Others: Recovery Is Gaining Momentum

good.news.econ@gmail.com (Eldon Mast) — Fri, 06 Nov 2009 03:44:00 +0000

John Chambers ignited markets on Thursday. The Cisco CEO joined other leading firms like Apple, Amazon, Alcoa, Intel, and others by stating that, "the quarter was very strong. The recovery is gaining momentum." Earlier in the week, the institute for supply management speculated that the US GDP is likely now growing at an annualized rate of 4.5%.

Chambers continued, "what we saw is a clear tipping point as our business continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times."

Elsewhere on Thursday the US Labor Department said the output per hour of nonfarm workers rose at an annual rate of 9.5% in the quarter, more than four times the average productivity growth rate of the past quarter-century. When taken together with the second quarter's 6.9% rise, it was the strongest productivity growth rate over a six-month period since 1961.

While unemployment remains high, initial claims for unemployment continue to fall and corporate profits have bounced back significantly from the strong downturn in Q1. As output keeps climbing, employment gains will follow shortly.

Such large productivity gains are quite common at the end of deep recessions and the beginning of recoveries. A healthy pattern is that productivity grows first, then employment rises, and finally wages increase.

It continues to be clear that this recovery will not be a jobless one. In fact on Thursday the government also reported that jobless claims dropped to a 10-month low raising speculation that the national unemployment rate has peaked will begin to fall as soon as next month.

Employment gains have already sparked reasons for optimism in many states.

As jobless rates continue to decrease nationally, almost all economic indicators will have turned positive: leading, coincident and lagging.

And as we've published here since February (and as was witnessed on Thursday), the stock market will continue its move -- swift and steep.

Announced Job Cuts Are Now At Below Average Levels

good.news.econ@gmail.com (Eldon Mast) — Thu, 05 Nov 2009 07:00:00 +0000

Challenger, Gray & Christmas, Inc. announced on Wednesday that planned layoffs at U.S. firms fell for a third straight month in October to a 19-month low.

As we've noted the labor market is continuing to improve as US economic activity rebounds.

Planned job cuts announced by U.S. employers fell to 55,679 in October, down 16 percent from 66,404 in September.

The October job cuts represent the lowest level since March 2008, and are now at or below levels that were normally seen throughout all of 2006 and 2007.

In fact at a 55,679 monthly rate, the cuts are now well below the monthly average cuts for the last three years.

The Challenger report is one more indication that a return to US job growth is just around the corner.

Auto Sales Cruise Ahead in October

good.news.econ@gmail.com (Eldon Mast) — Wed, 04 Nov 2009 02:40:00 +0000

On Tuesday major auto manufacturers indicated that their October sales rebounded significantly following a weak September.

The increase to the US annualized sales rate was nearly 20 percent better than September's measure. Early estimates show the bump adding $5 billion, or roughly 1.5% to October's retail sales numbers versus September's readings.

It now appears as though consumers no longer needed cash-for-clunker rebates to commit to new auto acquisitions in October.

GM, Ford and Nissan all reported that their sales are now up from a year ago.

Jessica Caldwell, senior analyst at auto industry tracker Edmunds.com said, "We are trending in the right direction," and "it should be easier for auto companies to report year-over-year growth from this point on."

Ford -- which reported a strong profit on Monday -- claims that increased production in October will help to replenish diminished supplies on dealer lots. Further, Ford sales management points to strong restocking demand through the end of 2009.

US Growth Probably Now at 4.5 percent

good.news.econ@gmail.com (Eldon Mast) — Tue, 03 Nov 2009 01:32:00 +0000

The economy continues to rebuild itself and the manufacturing sector has now grown for three consecutive months. According to the Institute for Supply Management, their PMI registered 55.7 percent. That is 3.1 percentage points higher than the 52.6 percent reported in September. It was the highest reading for the index in over 3 years and manufacturing output month over month rose at the fastest pace in 63 months.

This year, the PMI has correlated extremely accurately with the growth in the overall economy. When annualized the current reading corresponds to a 4.5 percent GDP growth rate.

In more good news on Monday, the National Association of Realtors said its Pending Home Sales Index, rose 6.1 percent -- the index is now at its highest level in nearly three years.

An additional report from the US Commerce Dept showed that U.S. construction spending made its largest gain in a year in September. The report reflected a huge increase in private residential building -- the largest increase in more than six years.

In continued positive earnings news: For the first nine months of the year, Ford has now posted a $1.8-billion profit. That’s a $10.6-billion improvement from the same period a year ago. Surprisingly, Ford said that even without Clunkermania, it would have showed a profit. Further, Ford said it “expects to be solidly profitable in 2011, with positive operating-related cash flow.”

On the jobs front, the ISM's Employment Index registered 53.1 percent in October, which is 6.9 percentage points above the reading reported in September. This indicates the first month of growth in US manufacturing employment in over a year. Eight of the ISM's 18 manufacturing industries surveyed reported growth in employment in October.

To recap, the overall economy is now growing robustly, the housing market continues to recover steadily, earnings news continues to be extremely positive, and it now appears that we've seen the early concrete indications of employment growth.

While there continues to be fallout from the deep recession earlier in the year, it is becoming clearer by the day that upward economic momentum will persist and that this will not be a jobless recovery.

Colorado Governor: "Reason For Optimism"

good.news.econ@gmail.com (Eldon Mast) — Fri, 30 Oct 2009 20:28:00 +0000

An open letter from Colorado Governor Bill Ritter:

Here in Colorado, we're seeing encouraging signs of success and reason for optimism.

Last week we learned Colorado's unemployment rate has dipped to 7%, now nearly 3 full points below the national average of 9.8% -- and lower than all but a dozen states' unemployment rates.

We're still not out of the woods. Too many Coloradans are still struggling to find work, as businesses and families tighten their belts and adjust to the new economic reality. We continue to face a very difficult budget situation in the capitol. We're making tough choices from limited options, requiring everyone from state employees to those who rely on public services to make even more sacrifices in the months ahead.

While challenging, this new economic reality presents us with a fresh opportunity to think ahead, adapt and create new pathways to grow and prosper in the 21st Century.

That's why we're building New Colorado Partnerships that better connect government with businesses, schools, and our research facilities to invest in our people and attract the industries of tomorrow to Colorado. We're transforming government to keep pace with the rapid changes each Colorado business and family must face today, while making it tighter, more entrepreneurial, and more nimble to meet the challenges of these new economic times. We're offering tax incentives to businesses that create jobs in Colorado, providing access to capital, making revolutionary changes to improve our education system, and strengthening our public universities.

That's why Forbes.com and CNBC both rank Colorado among the top five states in which to do business. It's why Colorado schools are well-positioned to receive millions of dollars in federal "Race to the Top" funding. And it's why many experts believe our diverse economy will help Colorado emerge from the national recession sooner and stronger than other states.

Our bold strategy is already paying dividends, as last week's unemployment report confirms. We are setting an example for the rest of the nation to follow. The challenges ahead are great, but they are not impossible, and Coloradans have a reason for optimism.

Please join me to share this simple message of hope:

While unemployment continues to creep upwards of 10% or even 15% in other states, Colorado is open for business and attracting new jobs every day. This month alone, two major New Energy Economy companies -- SunRun and SMA Solar Technology -- have announced plans to open their doors and hire more than 700 new workers here in Colorado.

They join dozens of other new energy, aerospace, bioscience, and technology companies adding thousands of new jobs and forever re-orienting Colorado's economy to be more innovative, more prosperous, and more sustainable.

Government can't do everything, and our New Colorado Partnerships aren't the only reason companies and entrepreneurs are choosing to open their doors in Colorado. But government can do a lot to build a brighter future for families and businesses and help all of us achieve the Colorado Promise, and so long as I'm governor, it will.

Sincerely,

Bill Ritter, Jr.
Governor of Colorado

Q4 Growth Likely to be Stronger than Q3

good.news.econ@gmail.com (Eldon Mast) — Thu, 29 Oct 2009 23:16:00 +0000

Thursday we got another indication that the U.S. economy is returning to strong growth. The government's first estimate for the third quarter came in at a 3.5 percent annual pace.

Again most economists were wrong. The consensus was for only a 3.2% jump. In fact several analysts had actually lowered their estimates yesterday in advance of the report.

The quarter was the first to experience the positive effects of emergency government stimulus programs put in place earlier in the year.

Growth in consumer spending and confidence, which accounts for about 70 percent of the economy, contributed significantly to the rebound.

Purchases of durable goods, which include autos, jumped 22 percent, the biggest increase since 2001. The governments $3B Clunkermania program obviously contributed significantly to that huge durable goods jump. But what was perhaps more encouraging was the data that showed that even excluding sales, production and inventories of automobiles, the economy grew 1.9 percent in the quarter. The stimulus programs are acting as a catalyst and not just the only source of growth.

Many economists now agree that the recession ended earlier in the year. As we have said for quite sometime, when the National Bureau of Economic Research officially marks the recession's end, they will likely point to June 2009. And that prediction was made by professor Mark Hirschey back in November of 2008.

In the 3rd quarter, residential construction also jumped at a 23 percent annual rate. It was the first quarterly gain in almost four years and the largest jump since 1986.

The home-building market -- which as be ailing for several years -- surged as sales climbed, propelled in part by an $8,000 tax credit for first-time buyers. The credit (also part of the emergency stimulus past by the US government earlier this year) will likely be extended with the support of the majority of the Senate.

And Q3 earnings continue to be strong -- pointing to not only moderate growth in Q3 -- but extremely strong growth in Q4 and into 2010.

Amazon in particular has used the past year of recession to continue to decimate it's brick and mortar competition. Amazon, which is reorganizing the retail market value chain continues to produce strong results. “You should see more expansion in the categories we’re in, as well as more geographical expansion over time,” said Amazon's Chief Financial Officer Thomas Szkutak last Thursday.

In the overall manufacturing sector, total inventories in Q3 continue to drop precipitously. The only conclusion: factory production will need to keep pace with significant upward momentum.

As stockpiles decrease and demand continues to grow more factories will need to come back online quickly. The gains required to produce such output will now lead to a quick rebound in hiring.

In September, the unemployment rate likely reached it's peak and with growth now ramping significantly in the 4th quarter, overall job growth is just around the corner.

You'll remember that we warned back in August to not be surprised by robust Q3 growth. Don't be caught off guard again with Q4 growth that will prove to be even stronger.

A Jobless Recovery? Not this Time

good.news.econ@gmail.com (Eldon Mast) — Wed, 28 Oct 2009 03:46:00 +0000

Early this week a survey release by the National Association for Business Economics (NABE) provided new evidence that the U.S. recovery is solidly under way and will be sustained well into 2010. The best news of the survey is that now a majority of companies surveyed are planning to boost their payrolls this year and next.

For the first time in over a year, the percentage of businesses expecting to hire workers over the next half year exceeds the share that project more layoffs.

Additionally the majority of firms now foresee that they will spend more on new capital equipment in the next six months adding more fuel to the growing recovery in 2010.

The survey shows that companies are generally becoming more optimistic about the future. As initial claims for unemployment continue to fall, the survey results are one strong signal that a return to job growth for the US economy is just around the corner.

The NABE survey's select group of retailers, health-care providers, hotels, restaurants, finance firms, insurance companies, and real estate employers all forecast job growth in 2010.

Much of the fuel for optimism has come from much better than expected results in Q3. Earlier in the year many economists had forecast lackluster results for Q3, but most firms have smashed those meager expectations. Since the start of the third-quarter reporting period, 80 percent of the companies in the S&Ps 500 Index have released better-than-expected results, according to Bloomberg, First Call, and Thomson earnings data. As a percentage so far, that's the best quarterly showing in 16 years.

Not only are a majority of firms beating Q3 expectations, forecasting job creation, and upping capital expenditures, but every single company polled this month anticipates the economy will expand in 2010.

Surprise, surprise, surprise!

Buffett: "Enormous Progress"

good.news.econ@gmail.com (Eldon Mast) — Sun, 25 Oct 2009 22:08:00 +0000

This past week Warren Buffett said that it is now very clear that the low point in the US economy has already passed, with "enormous" progress being seen over the past year.

Buffett attributes much of the strong uptick to swift government action last fall and winter. The actions were paramount in keeping the economy from complete collapse.

"We made enormous progress since a year ago... What happened in September and October of 2008 will particularly be remembered for a long, long time," Buffett said in an interview with Business Wire CEO Cathy Baron Tamraz that was released late in the day Tuesday.

Buffett continued, "And while the governmental authorities malign things sometimes, they fortunately did some very right things, very important things. They did them properly, and they kept us from going over the cliff."

Senate Likely to Extend $8,000 Home-Buyer Tax Credit

good.news.econ@gmail.com (Eldon Mast) — Sun, 25 Oct 2009 04:37:00 +0000

Senate Majority Leader Harry Reid has proposed a new version of a popular home-buyer tax-credit extension. Folks close to the matter claim a vote on the proposal is coming shortly.

Another recent Senate alternative would continue the $8,000 credit for four months and then gradually phase it out after that. Current law has the credit expiring at the end of November.

The value of the credit would drop by $2,000 every quarter until it halted completely by the end of 2010.

The National Association of Realtors supports the extension of the credit though at least the first two quarters of 2010 to assure that recent new home sales is firmly on a recovery track. They claim that home-buying activity in that six-month period could be crucial for new stability in the housing market again.

On the contrary, the Reid proposal wouldn't be nearly as effective at stimulating home sales, Mr. Salvant said, because it would start winding down during the second quarter.

The debate comes as a Treasury auditor revealed this week that the Internal Revenue Service improperly issued millions of refunds related to the credit.

At a House panel hearing this week, an IRS official said it is reviewing 100,000 returns to determine if credits were paid appropriately. Given the popularity of the credit, however, experts say the allegations are unlikely to derail the push to extend it in some form.

Spurred on by the credit home sales have been recovering nicely in the past six months. On Friday home sales were report to jump significantly in September. Existing home sales rose 9.4 percent. The West was the strongest region, up 13.0 percent. In an extremely encouraging sign, supply on the market fell back sharply -- down 7.5 percent in the month. Supply is now at its lowest level in 2-1/2 years.

Q3 earnings continue to impress, major firms are surprising to the upside, and markets are continuing their break-neck bounce. With second half growth coming on strong, an extension of the tax credit can mean nothing but good news for the 2010 housing market.

Jobless Claims Decline for Seven Straight Weeks

good.news.econ@gmail.com (Eldon Mast) — Fri, 23 Oct 2009 03:45:00 +0000

Data release Thursday shows seven straight weeks of decline in the four-week moving average of initial claims for unemployment. The moving average is widely seen as the best gauge of underlying initial claims trending.

Additionally, the number of people collecting long-term unemployment benefits in the week ended October 10 dropped to the lowest since March. This measure has also trended lower for five straight weeks.

These two are clear signs that unemployment is close to peaking and that the October employment report will likely show improvement over Septembers report.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, also edged down to 4.5 percent in the week ended October 10 from 4.6 percent the prior week.

Another hopeful sign was that the number of mass layoffs, defined as job cuts involving at least 50 people from a single employer, fell by 129 to 2,561 last month.

Bad News Bears Battle Break-Neck Bounce

good.news.econ@gmail.com (Eldon Mast) — Tue, 20 Oct 2009 03:34:00 +0000

Phrases like dead-cat bounce, house of cards, stagflation, W-shaped, U-shaped, lackluster, sucker's rally, deflation spiral, run-away inflation, and great depression were all in their pronouncements.

The bad news bears have pointed to a fearful, unemployed consumer who has cut up her credit card, has no more savings, and a government that has only racked up more national debt -- the dollar is dead -- they claim.

But the Q3 business realities continue to paint a starkly different picture.

Stimulus programs are firing up. Inflation is under control. Manufacturing lines are back on-line. Equities are on a roll. Optimism is accelerating.

So what are the doomsters missing?

Here's what Barton Briggs (Managing Partner of Traxis Partners Investment Fund) writes in Newsweek:

"First and foremost, they are betting against America, the greatest entrepreneurial engine ever created. History says buy America when it's down. In addition, emerging economies may well be the new dynamo of growth. They now account for 35 percent of world GDP and are growing two to three times faster than the developed world. S&P 500 companies now collect almost 50 percent of their revenues from overseas, and almost half of that portion comes from these fast-growing developing countries. Another factor could be that stocks currently despite the rally are still deeply undervalued. The rule of thumb is that stocks should sell at a price/earnings ratio equal to 20 less the inflation rate. Assume S&P 500 operating earnings are $70 to $75 next year and inflation is 1 percent, you get a theoretical price far higher than the current level of 1060."

Not only will the second half of 2009 continue to be strong, but 2010 will likely reap the benefits of this new international growth dynamo. It will be interesting to see where and when the dead cat lands.

JPM, Intel Ignite Markets, Fed Affirms

good.news.econ@gmail.com (Eldon Mast) — Thu, 15 Oct 2009 03:56:00 +0000

As a Q3 positive earnings season rolls on, JPMorgan Chase and Intel ignited the markets on Wednesday. Later in the day, minutes from the Fed's most recent meeting reaffirmed our convictions that this recovery indeed will be strong and prolonged.

Intel reported third quarter revenue of $9.4 Billion which represents the largest second to third quarter growth in over 30 years. You will remember that earlier in the year Intel was one of the first firms to invest significantly during the downturn, continue to forecast recovery in 2009, and further downplay any notions that a recovery would be lackluster and bumpy. So far, their forecasts have be right on target.

JPMorgan, the first of the big banks to release earnings for Q3, reported a $3.59 billion profit. In a significant trend reversal, the company said for the second straight quarter there are actually now signs of stabilization in delinquencies among its consumer loans.

And as the markets continued their steep drive higher, the minutes of the two-day Federal Reserve FOMC meeting that concluded Sept. 23 were released. They contained the most explicit statement yet from the Committee that it now firmly believes the recession that started in December 2007 is over.

According to the minutes: "Many participants noted that since August, they had revised up their projections for the second half of 2009 and for subsequent years."

Like Q2, Q3 results continue to surprise, surprise, surprise.

Q3 Earnings Season Underscores Rebound

good.news.econ@gmail.com (Eldon Mast) — Thu, 08 Oct 2009 04:22:00 +0000

While skeptics remain, Q3 earnings season kicked off on Wednesday with almost all those announcing earnings surprising to the upside.

Alcoa, the firm which much earlier in the year pegged the global turnaround, swung to a profit in Q3. "We do clearly see growth, substantial growth ... in China," Alcoa CEO Klaus Kleinfeld told reporters. "The second half of the year is clearly better than the first half in many industries and many regions." You may remember Kleinfeld's "giant sucking sound" of demand predictions.

Google also reasserted our sentiment of several months now, "We are clearly seeing aspects of recovery, and what is notable is that we’re seeing aspects of recovery not just in the United States but in Europe... We never stopped hiring, but we told our team internally and we’ve said to many other people that we are increase our hiring rate and our investment rate in anticipation of a recovery."

Our favorite perma-doomsters like Nouriel Roubini continue to beat the drum of "double dip recession", but the Q3 earnings results will paint a much different picture.

October Reports off to a Very Good Start

good.news.econ@gmail.com (Eldon Mast) — Mon, 05 Oct 2009 03:47:00 +0000

As another October comes into focus there are many signs that robust recovery is no doubt firming in late 2009:

1. Retail sales improved in the last week in Sept according to ICSC-Goldman's tally which rose 0.1 percent. The gain represents a 0.9 percent year-on-year gain that compares with a plus 0.6 percent gain the week before. Goldman's report summarizes that retail traffic is indeed improving. Redbook, like Goldman, reported strength for store sales and extends an improving trend. Redbook further reports that Halloween sales are off to a good start. Later in the week the Commerce Department reported that while everyone was expecting spending to be up in motor vehicle sales, consumers were actually spending elsewhere, too. Consumer spending spiked on clunkermania auto purchases as personal consumption expenditures surged 1.3 percent in August. Indeed there was strength in durable goods spending, which jumped 5.3 percent on sharply higher motor vehicle sales. However, non-durables were robust also with a 2.3 percent boost and services also advanced 0.4 percent.

2. Case-Shiller reported a third month of gains for home sale prices. Their index rose 1.7 percent in July on top of a 1.4 percent gain in June and a 0.5 percent gain in May. Interestingly almost all metro areas now show sale price gains or at least flat conditions in the July report period. Year-on-year rates also improved for a third month. The pending home sales index also jumped in August, up 6.4 percent for a year-on-year gain of 12.4 percent. All regions posted home sales increases for August.

3. The third estimate for second quarter GDP clearly shows the economy at the recession bottom back when we technically called the recession's end in June. And the component mix for second quarter GDP adds to credibility our argument that the third quarter will be much more positive than the lackluster results many had predicted. For the second revision to second quarter GDP, the Commerce Department pushed up its estimate to an annualized 0.7 percent decrease from the previous estimate of minus 1.0 percent.

4. On the employment front, Challenger's count of layoff announcements fell to 66,404 in September, down from 76,456 in August for the lowest total since March 2008. Industrial goods employment showed improvement as did the health care and construction segments. The Monster employment index also showed firming job prospects in many blue collar segments.

The first half of September was full of economic good news, and October is bringing more of the same.

The Good News Economist

Gates Foundation Gives Teachers a $335M Raise

More Convincing Reports Forecast A Jobs Rebound

Lowe's Co: ""We Certainly Do Feel Better..."

The Good News Economist Blog Turns One

UPS and Fedex Need 64,000 Holiday Workers

Add Japan to the Q3 Growth Column

Year Over Year Market Gains Shine Bright

Foreclosure Rates Continue Steady Decline

Housing Outlook Improves - Local Media Agrees

US Job Growth Likely By Christmas

Weekend Good News Wrapup

Cisco Joins Many Others: Recovery Is Gaining Momentum

Posted: Fri, 06 Nov 2009 03:44:00 +0000

Announced Job Cuts Are Now At Below Average Levels

Posted: Thu, 05 Nov 2009 07:00:00 +0000

Auto Sales Cruise Ahead in October

Posted: Wed, 04 Nov 2009 02:40:00 +0000

US Growth Probably Now at 4.5 percent

Posted: Tue, 03 Nov 2009 01:32:00 +0000

Cisco Joins Many Others: Recovery Is Gaining Momentum

Announced Job Cuts Are Now At Below Average Levels

Auto Sales Cruise Ahead in October

US Growth Probably Now at 4.5 percent

Colorado Governor: "Reason For Optimism"

Q4 Growth Likely to be Stronger than Q3

A Jobless Recovery? Not this Time

Buffett: "Enormous Progress"

Senate Likely to Extend $8,000 Home-Buyer Tax Credit

Jobless Claims Decline for Seven Straight Weeks

Bad News Bears Battle Break-Neck Bounce

JPM, Intel Ignite Markets, Fed Affirms

Q3 Earnings Season Underscores Rebound

October Reports off to a Very Good Start