"The Bottom" in pictures
Many people have been saying lately that the economy has bottomed and that recovery is right around the corner. I think that these people are half right. After falling off of a cliff at the end of 2008 and the beginning of 2009, the deterioration of the U.S. economy has slowed dramatically. I clipped four excelent charts containing data from last week from my free three day trial of Bespoke that show evidence of this bottoming process:
The Richmond Fed Manufacturing not only came in stronger than analysts were expecting, but it was actually positive. This is the second highest manufacturing reading that we have seen since the recession began.
While weekly jobless claims came in slightly worse than expected last week it's tough to dispote that they seem to have topped out.
Home prices are still falling, but sales of existing homes have finally started to rebound.
Consumer Confidence also came in better than anslysts were expecting last month. May saw the third straight year-over-year increase in confidence. Increases in consumer confidence are rare during recessions. This is the first time that three consecutive positive readings has ever happened in the middle of an official recession.
While I don't think that the recession is over yetI do think that we have reached the bottom of a Fat "U" or "L" shapped recession with a very, very slow recovery. I still think that stocks are ahead of themselves at this level, that earnings will be weak and future growth slower than we have become used to, but that we're not all doomed like many believe.
My oldest son is home sick from school today, so I'm off to go color some pictures. Perhaps I'll sign on later tonight.