"In January, I was writing that fundamentals had taken an upswing, and that the US economy was going to try to resurge in the third quarter.
The numbers that came in for January and February did show what P-Nat projected, which was a gradual bottoming pattern overall and the beginning of some upticks. Bloomberg today:
Orders for U.S. durable goods unexpectedly rose in February on a rebound in demand for machinery, computers and defense equipment.
...
Combined with reports showing improvements in retail sales, residential construction and home resales, the figures indicate the economy is stabilizing after shrinking last quarter at the fastest pace in a quarter century. Stepped-up efforts by the Obama administration and Federal Reserve to ease the credit crunch may help revive growth later this year.
Last night Obama took credit for these events, but the stimulus package had nothing to do with it - the effects of that haven't even hit the economy yet. Very little of that package will be felt in the first half of 2009, in fact, and less than 25% of the effect will be felt in 2009. I would also like to point out that at the time the stimulus bill was being debated, the administration was claiming that the economic emergency was so dire that the representatives and senators shouldn't even be allowed to read the thing before they voted on it. Instead, this was what was really going on in the economy.
According to P-Nat, the major drivers of these statistics were price drops and need. Price drops in housing and price drops in energy, which led to a defusing of inflation, and led to control of food prices, which resulted in a pretty signficant boost to effective incomes for the bottom third of the households in the US. And need, which is just a matter of appliances, autos, shoes and clothing, for example, wearing out, babies being born, people buying things they really need, because they have to have them whether they want to spend money or not..."
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