Despite Recent Bad News, Recovery May Be On Track


Latest News > Industry News

March 2 — Despite a string of recent negative economic reports, the U.S. economy remains on track to recovery, says Jim Haughey, chief economist for Reed Construction Data, in his blog at www.reedconstructiondata.com.

Haughey cites several recent indications that the economy continues to falter:
But, he says, "This run of bad news is not unusual at this stage of an economic recovery." There are two reasons to believes these reports actually underestimate the strength of the economy, he adds.

"First, the unseasonably bad weather has clearly cut the job count, especially in construction. This is temporary and will be reversed," Haughey says. But in the meantime, fewer people working means fewer goods produced and this affects other economic reports.

"Second, inflation is now barely above 0.0%," he says, some are even falling. "While this is positive in the long run, it is currently reducing the reported value of factory and consumer sales."
"Lenders are selling bad loans to speculative investors at discounts as high as 70% and using the cash to increase mortgage rollovers and new lending."

Read the complete blog entry here.