What an amazing year. It started out positively as businesses were hiring again, confidence increased and growth seemed poised to change gears. But then gasoline prices broke the critical $4.00 a gallon level and consumers got worried. There was also a divisive debate over the debt ceiling, a downgrade of the U.S. debt, huge market volatility, a devastating tsunami which cut the Japanese supply chain and the European sovereign debt crises. When you come to think about it, the continued growth of the U.S. economy is amazing and shows just how resilient it is. Continue Reading »

Consumers and businesses keep telling us conditions are bad. But the recent economic data have been surprisingly solid, pointing to an accelerating recovery. Unfortunately, the economy has had nothing but bad luck and the problems facing Europe and rising energy costs are two more hurdles that must be cleared before solid growth returns. The economy is expanding and the pace of economic activity quickened during the summer. Third quarter GDP growth of 2.5% is hardly gangbusters but the details of the report were better than the headline. Consumers are spending again with big-ticket purchases leading the way. But more importantly, services demand has come back. This lagging component is nearly two-thirds of all spending and a turnaround here would be welcome news. With October retail sales being even better than expected, it looks like the holiday shopping season has gotten off to a strong start as well. Continue Reading »

After the bizarre August events, investors, commentators, politicians and not a few economists became convinced the economy was headed directly into a double-dip recession.  Well, the path from growth to decline is not as clear as many thought.  Job growth is improving, manufacturing is expanding and consumers are actually buying big-ticket as well as lower-priced items.  No, the economy is not shifting into high gear, but it hardly looks like a recession is inevitable. Continue Reading »

Maybe fear is not the only thing we have to fear, but it is the key problem facing the economy. The drum beat of negative economic news is dominating the information networks:  The economy isn’t creating any new jobs.  Inflation is picking up.  The government isn’t able to find a solution.  The stock market is an out-of-control roller coaster.  What is an average person to do?  Well, it looks like hunkering down is back - and that is the biggest threat to the recovery. Continue Reading »

What a month. Congress decided that it really did have to raise the debt ceiling, a rating agency decided there actually was some risk the U.S. could default on its debt, the government decided that the Great Recession was even worse than originally thought and the recovery was even weaker, and the Fed decided that the economy was going to be so weak that rates had to be kept low until mid-2013. Wow! Yes, that was the month that was. Continue Reading »

So far this year the economy has been on quite the roller coaster ride.  After a slow start, the job market heated up and by April, conditions were looking a lot better.  But then gasoline prices surged and consumers began pumping extra spending money into their gas tanks.  Add to that the continued weakness in housing, limited credit availability, the financial crises in Europe and the debt-ceiling debate in Washington and it should surprise no one that consumer spending faded and business leaders assumed a wait-and-see attitude. Continue Reading »

Summertime and the living is still not easy. Job growth has stumbled, consumer confidence has faded, and business expectations have eased. Clearly, the economy has hit a soft spot. Does that mean a double-dip recession is possible? Right now, that does not look likely.  Instead, if gasoline prices keep going down, we could see a rebound by the end of the summer. Continue Reading »

Bubbles inflate. Bubbles burst. When the last major bubble – housing – exploded, it crashed the financial sector and ultimately the economy. This time, the piercing of the oil balloon should remove one of the major hurdles to stronger economic growth. If money that consumers were being forced to spend on gas returns to their pockets, it may be just the tonic that cures the sluggish recovery ills and allows activity to really accelerate. Continue Reading »

If you have filled up recently you know full well the pain we are all feeling from the surge in oil and gasoline prices. Pumping all that money into our gas tanks instead of having it available to buy the things we really want is a major problem for the economy. But, coming into April, the economic upturn was gaining momentum. We should weather this storm, though the return to stronger growth may be delayed. Continue Reading »

This post is part of a series by Joel Naroff, an economist who serves as an advisor to Susquehanna. The recovery had been tooling along at a slow but steady pace. Consumers were spending their tax cuts, businesses were hiring and investing and it looked as if the economy was ready to shift gears from recovery into expansion. Then the world and its inter-connected economy were rocked by political instability in some oil-producing nations and the earthquake and tsunami in Japan. In addition to the devastating toll these disasters have taken on human life and local communities, there will be a global economic toll as well. Continue Reading »

This post is part of a series by Joel Naroff, an economist who serves as an advisor to Susquehanna. The first reading on economic activity in 2011 was a promising one, showing that the manufacturing sector is really beginning to heat up. The Institute for Supply Management’s manufacturing index rose solidly, driven by a surge in new orders. This was followed by another update report from the Institute, this one based on a survey of managers in non-manufacturing businesses. This showed that the service sector of the economy is growing solidly as well. Demand rose sharply as the new orders index hit its highest level since August 2003. Other reports also reinforce the view of a gradually building economic recovery. Despite the lousy weather - or maybe because of it - major retailers reported solid sales gains for January. Continue Reading »

This is the second in a series of blog entries by Joel Naroff, an economist who serves as an advisor for Susquehanna Bank: In the wake of November’s economic data, we got all dressed up, but then found out there was no coming-out ball to go to. The questionably soft November jobs report - coupled with the surprisingly robust ADP National Employment Report® data - seemed to point to a strong gain in payrolls in December. Alas, that did not happen. Instead we got another modest increase in jobs. Continue Reading »

This is the first in a series of blog entries by Joel Naroff, an economist who serves as an advisor for Susquehanna Bank. Just when it seemed safe to believe the labor market was firming and job growth was coming back, we were reminded that this recovery is proceeding with fits and starts. Job growth in November was extremely disappointing. The recovery continues onward, but this jobs report seems to say that it hasn’t shifted gears just yet. Continue Reading »