Some good news on the street today as CNN/Money reports the Economy Hits the Sweet Spot.   Consumer spending continues unabated, and both the job market and manufacturing data are showing improvement. Of course that depends how you read it, but unemployment remains at 4.5%, which historically is pretty good.  Much of the job growth is coming in the service sectors such as health, education, hospitality and leisure… can you say Boomers?! That will be a continuing trend as our “service economy” expands.  At the same time however, CNN/Money also reports that Incomes See First Drop in Two Years.  It hardly seems measurable, but the Commerce Department reported a 0.1% drop in U.S. incomes… perhaps more importantly it was the first since August of 2005. Related to the service sector growth? Maybe, but analysts have tied the income drop to “unusually large bonuses and the exercising of stock options” early in the year. Ok… if they say so. Oddly, consumer confidence is up for the month of May, even with high gas prices. The standout weak area is housing of course.  Still a lot of supply and less demand, yet builders keep building to ensure their foothold in key areas remains strong. I think it will take 2-3 years to work through the housing issues. The subprime mess has resulted in tightened credit lending standards, and there are many potential buyers that simply are not finding the financing they had counted on. There’s no time like now to maintain that credit rating, especially if you’re in the market for a home the next few years.  It seems we are walking in the sweet spot, oscillating back and forth with mild inflation and a still growing economy. I certainly prefer this market climate to that of a few years ago when nothing seemed to appease investors.  On my desk is a little notepad calendar with thoughts for each day. For the life of me I don’t know what it’s called, who wrote the quotes or even who makes it… I tried searching to no avail (if anyone knows please tell me!). There are some great quotes, and with apologies to the author, whom I will cite when I find out his/her name, here’s a good one for the day:
“We look at what is going on around us, and we size up our prospects. Will we make it? But the best information you have is not national economic reports or even the company newsletter. It is your own approach, and it starts with two simple beliefs: you can get the job done, and you can show others that you can get the job done.”
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