Anemic Economic Recovery

Recent indictors continue to support the impression that we’re in the midst of a weak economic recovery.

Americans bought about the same number of light vehicles in November 2009 as they had in November 2008. That’s the second month in a row with flat year-on-year comparisons. Admittedly, flat is better than the declining year-on-year comparisons to which we’d become accustomed. But remember that by November of 2008, auto sales had really fallen off the cliff.

Data source: Wardsauto.com

The number of cars sold last month was lower than observed for March through June. But the spring-to-fall decline was more moderate than the usual seasonal softness, meaning you could read the latest numbers as a modest improvement on a seasonally adjusted basis.

Estimated U.S. light vehicle sales at a seasonally adjusted annual rate. Source: Calculated Risk

I’m seeing the same story in new home sales. These are up on a seasonally adjusted basis mostly because they had previously been so very low, not because the market is remotely back to normal.

Source: Calculated Risk

Source: Calculated Risk

Another worrisome indicator: ADP estimates that U.S. nonfarm private employment decreased 169,000 from October to November 2009 on a seasonally adjusted basis. Nobody can seriously claim that things are back on track until employment begins to improve. And I don’t count “smaller declines” as “improvement”.

There was one bright spot of sorts in the auto sales. GM dealers in the U.S. delivered 151,427 vehicles in November. But GM with its joint ventures sold 177,339 vehicles in China in November. It seems if you want to sell something today, the place to do it is China.

Even if what you’re selling are American cars.

Anemic recovery

About James D. Hamilton 244 Articles

James D. Hamilton is Professor of Economics at the University of California, San Diego.

Visit: Econbrowser

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