Three main indicators of U.S. economic activity show support for the latest Beige Book conclusion that the economy is moving toward better conditions. Normally, substantial government spending is enough to generate a boost in the economy. We are expected to see this happen as the government is going forward with a $600 billion bond purchase plan to lower long-term interest rates. The idea is that through large-scale government spending, demand for goods and services will increase, thus further increasing manufacturing and services, leading to growth of jobs.
Consumer confidence is an indication that the American public is feeling good toward the economy, and this happy outlook is expected to translate into increased spending on goods. For example, if your neighbor feels secure that good economic conditions will continue, he may decide to build an additional room onto his home. Thus, he would purchase the raw materials needed and invest in labor. If economic expectations are low, he may decide to wait until next year.
The Consumer Confidence Index released Nov. 30 by the Conference Board shows that consumer confidence rose four full points within one month from October to November. This index is now 54.1, compared to 49.9 from October.
Following the intense shopping which occurred on “Black Friday,” the weekly Retail Sales Index from Goldman Sachs and the International Council of Shopping Centers also showed growth from -.6 to .5.
The National Association of Purchasing Management index, or (NAPM), gives a snapshot of conditions in the manufacturing sector . A reading of over 50 points indicates healthy economic activity in manufacturing. As shown in a data table from the Federal Reserve Bank of St. Louis, the current index figure is 56.6, and has been holding steady for the last two months. According to these readings, the economy shows signs of an overall positive growth picture.
The Beige Book news summary from the Federal Reserve Bank of Cleveland gives expectations that more people will feel confident enough to make new purchases. Thus, retailers will want to further increase their sales figures by having attractive sales and will feel more confident to lower prices on certain goods to maximize their income.
So, personally, I will benefit from lowered prices and will want to purchase items at the sale price. Since I am a volunteer for a nonprofit organization, I tend toward being more conservative in my buying activity, so this year promises to be more easy on the pocket! Yet, more demand for services may generally mean more demand for fitness and yoga, so I will have a greater flurry of activity in providing stress-relief programs!
My nonprofit is the world’s second-largest volunteer-run organization, The Art of Living Foundation. We rely on donations from our volunteers. If the Beige Book news is accurate, and according to other indicators, my nonprofit will have a good year as more people will feel upbeat enough to put their extra earnings into philanthropy! This is great news as we will have the support needed to help more and more people worldwide.
My work as a freelancer is definitely dependent on good economic conditions. Companies who hire writers and creative contributors are generally skittish to look for new contributors in more somber times. So this year may have quite a few surprises in store, and most likely some new creative opportunities may present themselves as employers begin to relax and will want to try out more innovative projects.
1) Carol Courter , http://www.conference-board.org/press/pressdetail.cfm?pressid=4074, The Conference Board.
2) No Author Given, (Data Table) http://www.reuters.com/article/idUSNLLTME6O620101130, Reuters.
3) No Auther Given, (Data Table) http://research.stlouisfed.org/fred2/series/NAPM, Economic Research, Federal Reserve Bank of St. Louis.
4) No Auther Given , http://federalreserve.gov/fomc/beigebook/2010/20101201/default.htm, Federal Reserve Bank of Cleveland.