As the Economy Enjoys Good News, Critics Receive Bad
There is nothing worse than good news to make negative people unhappy. The prophets of doom of the economy eat, drink, and sleep economic woes. When the economy shows weakness in any area, the rest of us slightly hold our breath. These advocates of malaise sigh also, one of relief.
As the 2006 mid term elections come upon us, the need for bad news is more important than ever for those who are hoping for a bad economy and have put their hope in a change of power. If the economy grows, so does the chances of the retention of a Republican majority. We are now down to around 5 weeks. Every bad day really counts. This month has been particularly difficult for those who would hope the worse for us. Two important stories indicate just how bad the situation is for them.
First, consumer confidence has driven up dramatically, much higher than expected. According to the article, the consumer confidence report "released shortly after the start of [stock market] trade, the index rose to 104.5 in the month, topping forecasts for it to rise to about 102.5 from 99.6 in August." Why is this important? It is simple, if confidence is down, so often is consumption. When that is down, so is productivity, employment, etc. This is important most of the time, it is extremely important as we approach an election cycle and the holiday season that begins at Thanksgiving. More than half of non-consumable purchases take place between Thanksgiving and Christmas. How big the final number of purchases are is linked directly to consumer confidence. If consumers are confident about the economy, they will drive that economy in a way that is beneficial for business.
Second, even as I write this article, the Dow is flirting with breaking its previous high and already did briefly this morning. This shows a level of confidence that goes beyond mere consumer hopeful thinking and indicates that many of the fundamentals in measuring an economy are still moving in the right direction.
I know, it is bad news for those who live off of such, but for the rest of us who actually make a living, I'm very pleased with these reports.
As the 2006 mid term elections come upon us, the need for bad news is more important than ever for those who are hoping for a bad economy and have put their hope in a change of power. If the economy grows, so does the chances of the retention of a Republican majority. We are now down to around 5 weeks. Every bad day really counts. This month has been particularly difficult for those who would hope the worse for us. Two important stories indicate just how bad the situation is for them.
First, consumer confidence has driven up dramatically, much higher than expected. According to the article, the consumer confidence report "released shortly after the start of [stock market] trade, the index rose to 104.5 in the month, topping forecasts for it to rise to about 102.5 from 99.6 in August." Why is this important? It is simple, if confidence is down, so often is consumption. When that is down, so is productivity, employment, etc. This is important most of the time, it is extremely important as we approach an election cycle and the holiday season that begins at Thanksgiving. More than half of non-consumable purchases take place between Thanksgiving and Christmas. How big the final number of purchases are is linked directly to consumer confidence. If consumers are confident about the economy, they will drive that economy in a way that is beneficial for business.
Second, even as I write this article, the Dow is flirting with breaking its previous high and already did briefly this morning. This shows a level of confidence that goes beyond mere consumer hopeful thinking and indicates that many of the fundamentals in measuring an economy are still moving in the right direction.
I know, it is bad news for those who live off of such, but for the rest of us who actually make a living, I'm very pleased with these reports.
posted by Kevin Price at 9:49 AM
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