Encouraging economic news seems to be popping up all over.
Consider these headlines from today’s Wall Street Journal: “Evidence Mounts of Strong Recovery,” that’s about the U.S. Also, “Bernanke Sees Little Inflation Threat.” Also, “Economic Recovery Picks Up Steam Across Asia.”
(Yes, to be balanced, there’s also a column by David Wessel headlined “Europe is Failing to Keep Up.”)
But Spring is in the air and one can consider notions of a “Goldilocks” economic enivornment rising in the U.S. from the ashes of deep recession and credit crisis. Goldilocks in ‘not too hot, not too cold.’
Quote of the day in support of all this comes from the Journal story on the surprising strength in U.S. retail sales. “There’s a growing risk that we’re underestimating the strength of the economy,” Stephen Stanley, chief economist of Pierpont Securities, told the Journal.
Sure, the sobering stats are still with us. Nearly 10% unemployment by official measure in the U.S. Housing prices that have far to go to recover.
But, still….
It’s worth giving some credit to the stock market, or, one should say, the bullish investors whose cumulative buying since March 2009 has created the rally that’s taken the Dow Jones Industrial Average above 11,000.
Those prices climbed a real wall of worry, naysayers and pessimists, double-dip recession theorists and the like.
Stock prices, of course, could go down tomorrow. And go down the next day and the day after that. But in their assumed role as forward-looking predictor of corporate earnings and economic activity, stock prices and the indexes they form look good right now.
We get reminders each day how far the economy and corporate Americas has snapped back – at least part of the way – from the depths of our great recession. Starbucks, which not long ago was going through a soul-searching to re-identify itself and cut costs (it closed many stores), announced today it was paying its first ever dividend. It is a modest 10 cent a share dividend, which will end up costing the company about $75 million. But the steps it took to improve profitability over the past year have allowed it to amass enough cash to not only pay out a dividend but authorize a new stock buyback program. It has grown its cash position pretty impressively. It had $1.35 billion of cash and short-term securities on its books at the end of December. That was up from $666 million in the quarter that ended September. Look for more companies to do the same thing.
