5 Hopeful Signs for the Economy in 2012

The economy may still seem bleak to many, but there are several glimmers of hope that suggest that 2012 may be a good year after all.

Author:: Seth Fiegerman
Publish date:: Jan 26, 2012 7:00 AM EST

When President Obama noted early in his State of the Union speech this week that “the state of our union is getting stronger,” there’s no doubt a few of those listening thought, “Oh really?” After all, just look at the statistics cited day in and day out by the Republican presidential candidates: some 13 million Americans are out of work and millions more have given up looking, the national debt is now greater than the country’s total output and Washington often seems too gridlocked to do much if anything about either. Given all that, it seems likely that some would probably use words like “bleak” or “broke” to characterize the current state of the union. There are plenty of reasons to be optimistic about the direction the economy is heading in though, some of which the president alluded to in his speech. MainStreet picked out some of the most significant data points from recent surveys and reports that suggest the economy is getting better rather than worse. Indeed, considering that much of the presidential election will hinge on Obama’s ability to convince voters of this, expect to hear the president allude to some or all of these points in the months to come. Photo Credit: Darren Blackburn

Even before the recession hit in 2007, the manufacturing industry was bleeding jobs as many businesses cut costs by relying more on cheap labor overseas. In total, the country lost more than 3 million manufacturing jobs between 2001 and 2007, and another 2 million during the recession. Economists assumed many of those would never come back, but in recent years there has been a significant turnaround. http://www.mainstreet.com/article/career/how-rehabilitate-dying-careerThe U.S. economy added 334,000 manufacturing jobs in 2009 and 2010, making this the fastest growth period for the industry since the late 1990s, according to data from the Bureau of Labor Statistics. At the same time, manufacturing production increased 5.7% on average each year since it bottomed out in June 2009, faster than at any other point in the 2000s. In fact, several big-name companies like DuPont and Ford have already begun to re-invest in manufacturing at home rather than overseas, which should provide even more job opportunities in the coming months and years. Photo Credit: WikiCommons.org

Every week it seems like we hear pundits and economists go off about how much debt the country is in, but it turns out that the U.S. has made more progress than most countries in bringing down the national debt. The ratio of public and private debt to the country’s gross domestic product dropped by 16 percentage points between 2008 and the second quarter of 2011, tying for the steepest drop of the 10 largest developed economies in that period, according to data from the McKinsey Global Institute. In fact, the U.S. was one of only three countries to see its debt-to-GDP ratio decline at all. Britain, Japan, France and others are all heading in the opposite direction. Much of this debt reduction came from households that cut their debt by defaulting on the pricey mortgages and loans they’d signed during the boom times. It’s tough medicine for sure, but as the report notes, “U.S. households have made more progress in debt reduction than other countries, and may have roughly two more years before returning to sustainable levels of debt.” Photo Credit: Getty Images

Retail sales hit a record $4.7 trillion in 2011, 8% more than in 2010, marking the biggest year-over-year percentage increase in more than a decade. In fact, average monthly sales were 6% higher than the monthly peak before the recession, suggesting that business is booming again for many retailers. Photo Credit: Orin Zebest

Several surveys put out at the end of 2011 found that employers expect to boost hiring in 2012. One CareerBuilder survey found that a quarter of all hiring managers plan to hire full-time employees this year, while ManpowerGroup estimates that roughly 9% of employers will hire more workers in the first three months of this year alone. What’s more, multiple economists told MainStreet that state and local governments should be in a better fiscal situation this year and should be able to hire rather than lay off state workers. That said, economists also predict that we won’t see robust enough hiring to significantly reduce the jobless rate, but any increase in hiring is certainly a good thing. Photo Credit: SOCIALisBETTER

A true housing recovery could still be years away, but a few recent reports suggest the market may have passed its darkest days. Sales of existing U.S. homes increased for five of the last six months of 2011 and hit an 11-month high in December of that year, according to a report from the National Association of Realtors. Meanwhile, analysts at Freddie Mac and CoreLogic both expressed some optimism that the housing market is showing signs of improvement – or at the very least, that it won’t get much worse. As CoreLogic’s chief economist noted in the report, “the time is right in 2012 for prices to begin growing again, and housing affordability will put a floor under any further significant declines.” Photo Credit: Images_of_Money

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State of the Union: Glass Half-Full Edition

When President Obama noted early in his State of the Union speech this week that “the state of our union is getting stronger,” there’s no doubt a few of those listening thought, “Oh really?” After all, just look at the statistics cited day in and day out by the Republican presidential candidates: some 13 million Americans are out of work and millions more have given up looking, the national debt is now greater than the country’s total output and Washington often seems too gridlocked to do much if anything about either. Given all that, it seems likely that some would probably use words like “bleak” or “broke” to characterize the current state of the union. There are plenty of reasons to be optimistic about the direction the economy is heading in though, some of which the president alluded to in his speech. MainStreet picked out some of the most significant data points from recent surveys and reports that suggest the economy is getting better rather than worse. Indeed, considering that much of the presidential election will hinge on Obama’s ability to convince voters of this, expect to hear the president allude to some or all of these points in the months to come. Photo Credit: Darren Blackburn