The debt debacle in Europe and partisan wrangling in America has overshadowed a lot of news in the last few weeks. And believe it or not, there are a host of positive economic headlines that hit the presses. Unfortunately, many investors and consumers were too preoccupied to notice.
That’s why during this holiday week, it’s worth recapping some of the headlines you might have missed. A look at GDP figures, the housing market, consumer spending, earnings and exports all show that Wall Street has a lot to be thankful for.
To be clear, very challenging times are still ahead. As unemployment remains high and 2012 electioneering makes Congress even more useless than usual, investors should be on their guard.
But in the spirit of the Thanksgiving holiday, here are five positive economic indicators that we should pause to appreciate for what they are:
Ending 2011 With GDP Momentum: The U.S. economy might end 2011 growing at its fastest clip in 18 months. The Commerce Dept. on Tuesday reported its revised third-quarter figure for GDP growth at 2%, down from its original estimate of 2.5%. Still, that’s the best rate since the end of 2010. And for the fourth quarter, various economists are revising their forecasts up at a host of firms. JPMorgan Chase (NYSE:JPM) sees gross domestic product rising 3% in the year-end period, up from a previous prediction of 2.5% recently. Macroeconomic Advisers increased its GDP forecast to 3.2% from 2.9%, and Morgan Stanley (NYSE:MS) boosted its GDP outlook to 3.5% from 3%. Those are substantive changes, and the uniformity of the increases is a sign of hope for the market.
Housing Seems to Have Stabilized: Builder confidence in the market for newly built single-family homes rose in November to the highest level in 17 months, as measured by the he National Association of Home Builders/Wells Fargo housing market index, while hope builds in the industry with mortgage rates around record lows. What’s more, permits climbed 11% in October, mostly thanks to strong demand for multifamily units.
Consumers Could Make a Splash This Holiday: On Oct. 31, a report was issued showing restaurant operators enjoying stronger sales and traffic. The Restaurant Performance Index, calculated by the National Restaurant Association, hit its highest level since June. What’s more, Holiday sales should be up over last year by 2.8%, which translates to an increase of more than $4.6 billion in spending, according to the National Retail Federation. In the much more immediate term, the number of shoppers “definitely” heading out on Black Friday this year is up to 33% from 27% in 2010.
Great Q3 Earnings: According to earnings statistics released a few weeks ago, third-quarter earnings were impressive. With 443 of 500 S&P index components to review, 76% of stocks reported higher EPS compared to Q3 2010 and 69% of S&P 500 components topped earnings estimates. And based on new guidance, the average S&P 500 stock is tracking over 8% earnings growth in Q4 of 2011, too. Earnings were largely overshadowed by debt woes in Europe, but these numbers are pretty impressive.
Exports In Focus: U.S. agricultural exports are projected to reach a record $137 billion this year and hit that same mark next year. As my old boss Louis Navellier liked to say, “What Saudi Arabia is to oil, America is to corn and soybeans.” Total exports topped $180 billion in September, up $40 billion or 28% since September 2009. The U.S. trade deficit declined by another 4% in September as a result. Consumer spending might not be blowing the doors off in America, but the fact that U.S. companies are exporting more grains, energy and other goods abroad is an encouraging sign.
Jeff Reeves is the editor of InvestorPlace.com. Write him at firstname.lastname@example.org, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.