Glimmers of recovery in wavering economy
Coloradans, including folks here on the Western Slope, are in a mood to buy vehicles, it seems. New car and truck sales have jumped 20 percent statewide this year, compared with last year, according to the Colorado Automobile Dealers Association.
Similar numbers appear to hold true for auto dealers in the Grand Valley. Nationwide, car sales have increased about 11.5 percent.
It’s one indication that our economy — nationally and in Colorado — may be poised for economic recovery. But it is hardly cause for irrational enthusiasm, to borrow a phrase from former Federal Reserve Board Chairman Alan Greenspan. A more appropriate reaction may be crossed fingers and cautious expectations, because for every bit of positive economic news there seem to be equal and opposite economic reports. For example:
✔ Consumer confidence fell in August, according to information released Tuesday. Experts had expected the consumer-confidence index to rise slightly in August, as it did in July.
✔ Also on Tuesday, another report indicated that home values in 20 U.S. cities rose in June of this year for the first time since 2010. Low interest rates and the fact that inventories of foreclosed homes are finally being sold off may be combining to push prices up, experts said.
✔ The weekly jobs reports and unemployment rate continue to linger below what some economists had forecast earlier in the year. The official unemployment rate nationally was at 8.3 percent in July, but that doesn’t include those who have stopped looking for work or people who are underemployed.
✔ U.S. stock markets have remained relatively steady and have maintained gains they accrued earlier in the summer.
✔ There was more discouraging news this week from abroad — from Spain to Japan, France to Hungary.
Obviously, all of the signs are not pointing in the same direction. There’s not even a clear explanation as to why people this year are buying more new cars and trucks than they have in recent years. Pent-up demand is one reasonable explanation, but why is it higher in Colorado than the rest of the nation? Furthermore, many economists had predicted that consumers who have money on hand would hold off on major purchases until after the November election, no matter what their political leanings.
All of this suggests that if you are a betting man or woman you may have a better chance wagering on horses than forecasting what will occur next with the economy. But, of course, everyone is betting on the economy to some extent.
We’re just glad that some people are starting to spend money on items like cars and that home prices are beginning to rise. And we join millions of Americans in hoping that the latest news is a harbinger of a real recovery on the horizon, not another false uptick.