Signs of revival on the factory floor emerged in the United States and Asia on Monday, fueling exultant buying on Wall Street and reinforcing a sense that genuine economic recovery was unfolding. But if the Great Recession has indeed relaxed its grip on American life, it has been replaced by something that might be called the Great Ambiguity — a time of considerable debate over the clarity of economic indicators and the staying power of apparent improvements.
Manufacturing expanded in the United States in December, the fifth straight month of gains, amplifying hopes that a job market hobbled by double-digit unemployment might finally be adding paychecks. New jobless claims slipped markedly last week. Some economists think data to be released on Friday will show the economy gained jobs in December, the first monthly net increase in two years. “We’re really coming back,” said Allen Sinai, chief global economist at the research firm Decision Economics. “The expansion is picking up the pace.” But many economists remain worried that momentum could soon weaken, with the economy sliding back into glum times. Indeed, the only area in which economists can reliably declare expansion is in the supply of competing narratives about the economy — perhaps to be expected in any transition between downturn and the inevitable turn for better. “That is always the nature of the boomlet after recession,” Mr. Sinai said. “People think it’s going to fade away.”
Investors pushed up stock prices, with the Dow Jones industrial average gaining 156 points, or 1.5 percent, and oil prices reaching a 14-month high, $81.51 a barrel. [See Pages B1 and B8.]
Much of the improvement in manufacturing — a small slice of the American economy — is the result of businesses rebuilding inventories after slashing them. The economy has also been stoked by $787 billion in federal spending aimed at stimulating growth… Read more here.
Source: NYT, 5 Jan 2010 Peter S. Goodman; Photo: www.topnews.in/files/