In contrast to the depressing attitude of many pundits and politicians, a new study by the Milken Institute says there is clear evidence that the economy is doing better than generally believed.
“Despite the formidable obstacles in its path, the U.S. economy remains flexible and resilient — and right now, it has more underlying momentum than is generally acknowledged. Our projections show cause for measured optimism: A return to modest but sustainable growth is close at hand,” says the report “From Recession to Recovery: Analyzing America’s Return to Growth”.
Tha author of the California think tank’s report, Ross C. DeVol, admits his analysis runs counter to “the dark tone of the current debate about where the economy is headed.”
The study cites a number of interesting stats to support its unconventionl — and optimistic — take on the economy, including:
— Business investment in equipment is surging, much of it driven by companies buying IT exquipment that was previously deferred. (The Commerce Department made the same point today, noting in its report that biz had invested more in equipment and software in 13 years in the second quarter.)
— Manufacturing production is rising and some laid off workers are being recalled. “Orders for nondefense capital goods and manufacturing output have increased by 19.9 percent and 7.9 percent, respectively, over the past 12 months.” the report says.
— Growth in China, Japan, Brazil will drive increased global demand for U.S. goods. ” Real exports are projected to rise 12.2 percent in 2010, 8.7 percent in 2011, and 8.6 percent in 2012.
— Consumers are buying, despite what you may think. “Total retail sales (including autos) rose 7.4 percent on a year over-year basis in May. Until May’s monthly decline from April, they had risen every month since September 2009. Overall personal consumption expenditures, including services, were up 4.6 percent from a year ago in May,” the report says.
— Corporate America has replenished its cash reserves after slashing costs. “Corporations are sitting on record levels of cash, corporate profits in the first quarter were up over 30 percent from a year ago, and capital costs remain low — all factors supporting investment.”
The Milken Report offers a lot more. Read it for yourself. Registration may be required.