Reuters/UofM consumer confidence index rose in July from 56 to 61, and 8% increase in one month.  While this may be a temporary effect of the tax rebates, it shows positively that American’s are reading my blog!  LOL  OK, perhaps not, but still, it’s very refreshing to see the mood picking up in this country.  Perhaps if gas prices can stabilize it will further boost confidence.

http://www.reuters.com/article/topNews/idUSN2538843020080725?feedType=RSS&feedName=topNews

Durable orders were up .8% in June, after a slight increase of .1% in May.  Durable goods (washing machines, forklifts and computers etc…) are a good indicators of economic resilience and the past two months have shown increases in the purchase of these products.

I’ve posted before here and other places that 70% of our economy is driven by consumption.  If we continue to consume responsibly and appropriately we will see a rebound.  I think we need to be a bit more sensible about our consumption which one would argue got many people into the housing situation they now face.  I am sure the stimulus checks are having an impact by now, and I read that congress is making noise about another stimulus package in the fall…stay tuned.

Also in June, Freddie Mac’s portfolio grew by an annualized 33% for June.  Good news for the troubled mortgage company.

Read more here:

http://www.reuters.com/article/businessNews/idUSN2538843020080725?feedType=RSS&feedName=businessNews

While new construction single-family homes sales fell again in June to an annual adjusted average of 530,000.  However the expectations were to come in at about 500,000.  And the median sales price of these new homes actually rose over $3,000… It’s nice to see any positive signs for the housing market.

http://www.reuters.com/article/businessNews/idUSN2451027920080725?feedType=RSS&feedName=businessNews

I found this article on B2B’s website yesterday in which the results of a poll of 500 small businesses were discussed. It is a short article but reveals that 65% of small business owners and decision makers rate their own business conditions as “good.”  32% rated their conditions as “poor.”

The irony of this is that the same 500 people rated the economy as “poor” to the tune of 71%!  I guess they focus on the evening news too.  I’ve linked to so many positive articles in the past year, that I personally can not believe our economy is in what I would consider “poor” conditions.  Could it be better, of course.  Could be be worse?  Alot worse.

We have short memories in this country.  Our economy, nor anyone else’s can sustain fantastic growth or conditions forever.  Economies like anything else need to take a breather so the dust can settle, and while we’re paying more for food and gas, our economy is also GROWING, a fact we have seem to lost sight of.  With all that’s going on in the housing market and with costs of staples like food and energy, we’re still forging ahead!  Yet turn on the evening news and get your daily dose of “the sky is falling!”

So the positive news for today is that a very good portion of small businesses are doing “good” and that’s good for our economy.   This country, which is the sum of all of the people, is much stronger and more resilient that the mainstream press would have us believe, and they’ve yet to talk us into a recession.  But don’t expect them to give up.  Doom and gloom sells for some stupid reason…

Caterpillar, a maker of heavy industrial equipment posted better than expected quarterly results. G.E. as I’ve stated previously is a bell-weather for the US economy, has entered into an 8 billion dollar joint venture with Mubadahla Investments, and they posted gains as well.

Oh, and did I mention oil drops below $128/ barrel…

As we struggle along to get our footing, which we will, positive signs abound that this country strives to succeed…  Thanks again to Reuters for keeping economic news balanced…

http://www.reuters.com/article/businessNews/idUSL2219159120080722?feedType=RSS&feedName=businessNews

Three months or so ago, amidst $3.00/gallon prices I told my wife “as soon as we learn to be more conservative with our driving habits (as a country), demand will drop, and so will the prices.”

As I write this oil has plummeted over $14 per barrel in the past few days as the announcement that demand has dropped 5% in June.  It’s really common sense.  I’m not economics major, nor do I work with commodities, but my years in business have made one thing perfectly clear, if there’s less of a demand for your products, you can’t demand a premium price.

The recent drop in demand for oil means the producers are now fighting to sell us THEIR oil, hence there’s more competition amongst producers to get us their products, and prices drop… Let’s make it simple… You and your neighbor sell identical products, and you awake each morning to throngs of people demanding your products.  You look at your neighbor, you smile at each other, and commence selling at prices you both love.  The next day after both of you reading your customers are finding alternatives because they’re tired of paying your prices, you walk out your door and suddenly you both notice about 5% of your customers are gone.  You can both look into the future and see what’s coming…but how to get them back…you both lower your prices!

Now economists and others will comment that it’s far more complex of a process, and I’m sure it is in fact.  But my simplification is the basis for trading products, and it’s been that way since man traded fire for the wheel… Why do I bring this up?  My fear that as prices drop as demand drops, we will give up on our quest for alternative energy sources, and go back to driving our gas guzzlers, and not learn from this lesson.

Give it some thought, what do you think?

Although they’re cautiously optimistic, the recent G-8 Summit remains optimistic about the global economy.

http://www.chron.com/disp/story.mpl/business/5876556.html

G.E. due to their diversity and the markets they serve, is often considered a bell-weather for the U.S. Economy.  G.E. is the second largest market cap company on the market (next to Exxon), and often reflects in a microcosm, what is transpiring on a national level, economically speaking.

Their quarterly profits came in at 5.07 billion dollars, which was in line with analysts expectations.  And while the picture they paint for the remainder of 08 is not all roses, they still expect to meet expectations.

Read the complete story at Reuters, who I have to thank for being one of the few mainstream media outlets that reports what I consider a balanced portfolio of good and bad economic news.

http://www.reuters.com/article/businessNews/idUSWNAB042120080711?feedType=RSS&feedName=businessNews

In an interview with the Washington Times, Senator Phil Graham seconded my notions about this media driven, mental recession strategy.  I won’t repost the entire article, but the following excerpt sums up my sentiments pretty well.

“Misery sells newspapers,” Mr. Gramm said. “Thank God the economy is not as bad as you read in the newspaper every day.”

And when you read of consumer confidence plunging, it’s important to realize that it would make sense.  If you’re constantly told you’re ugly, at some point, when asked how you feel about yourself your going to respond that you feel ugly.  It’s a microcosm of what’s going on here. 

Remember, while things aren’t as rosey as they were ten years ago, growth can not continue at break-neck speeds.  But the facts remain, our GDP is UP, consumer spending continues to eek out small gains in light of everthing that’s going on, and many analysts have said we seem to found the bottom and are starting to rebound.

Consumption is 70% of our economy, and if we take the bait and pull back our consumption dramatically, a recession is inevitable.  So take your family to dinner and a movie, then head to Pier 1 and purchase that sleigh bed you’ve been eye-balling.  This country has come through much worse times than this, and we’ll look back in 10 years and see that we’re more resilient than mainstream media makes us out to be.

Read the entire story here:

http://www.washtimes.com/news/2008/jul/09/mccain-adviser-addresses-mental-recession/

Just today in my home state of Kentucky, officials are entertaining Integrity Manufacturing as they look for a home to invest 30 million dollars and employ 300 initially to manufacture Zap Autos, their alternative to fossil fuel driven vehicles.

Supporting what I’ve said in previous posts.  This evolution is going to spur entrepreneurial expansion in the  previously ignored  segment of alternative fuels.  And not just for cars my friend.  This is going to expand to home heating and cooling,  powering your  iMac, and  many other forms of alternative fuel use.  Just watch and see what  great things can come of this.

It’s always darkest before the dawn, and this is just the beginning of all kinds of positive news for our economy.  We just need to be patient enough to see it through.  Read the entire article on Wave news.

http://www.wave3.com/Global/story.asp?S=8643398&nav=menu31_2