After winter's freeze, signs of an economic thaw
Is the winter of our economic discontent giving way to a glorious summer of work?
While the cold months of January, February and even a bit of March saw frozen home and retail sales, hiring and other commercial activity, a slew of recent statistics suggest the thaw may finally have arrived. In the past couple of weeks, reports have shown increases in shipping, consumer confidence, durable goods orders and home prices.
All that may add to the already falling unemployment rate and possibly even increase long-stagnant wages. One sure sign consumers are feeling better: They're now paying down their mortgages more than their credit card debt -- a reversal of behavior that began during the financial crisis.
Here are some more green shoots:
- The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index increased 1.5 percent in April. That follows an 0.6 percent increase the previous month. The April number was up 4.8 percent from a year earlier, the largest year-over-year gain in 2014. Total tonnage for the year to date is up 2.9 percent from the same time in 2013.
- Rail traffic is also improving following a slowdown at the start of the year. The Association of American Railroads reports that for the first 20 weeks of 2014, U.S. railroads reported cumulative volume of 5.68 million, up 2.7 percent compared with the same point last year. That's only a measure of what was shipped in freight cars. The total shipped in carloads and in shipping containers (called intermodal units) for the first 20 weeks was 10.73 million up 4 percent from last year.
- Markit's flash Purchasing Managers Index Index hit 58.4 in May compared with April's final reading of 55. A reading above 50 signals expansion in economic activity. The employment subindex showed the services sector added employees at the fastest rate since January, at 53.1, up from 51.2 last month. New business growth for the services sector was at its fastest since February 2011.
- Orders for durable goods climbed 0.8 percent in April after an upwardly revised 3.6 percent gain in March, according to the Commerce Department. The month saw increases in orders for defense capital goods, fabricated metal products, transportation gear and electrical equipment, appliances and components.
- U.S. consumer confidence rose in May. The Conference Board said its index of consumer attitudes hit 83 in May, rising from a downwardly revised 81.7 in April. Consumers also say the future is looking better: The expectations index rose to 84.8 last month from a downwardly revised 83.9 in April. Consumers feel the job situation is essentially unchanged. Those who said jobs are "hard to get" slipped to 32.3 percent from 32.8 percent, revised from 32.5 percent in April.
- Credit card delinquencies and debt continue to fall, according to TransUnion, a credit reporting firm. The percentage of borrowers delinquent 90 days or more on their credit card payments fell from 1.51 percent in the first quarter of last year to 1.37 percent over the first three months of 2014. Average credit card debt per borrower also declined from $5,201 for the first quarter in 2013 to $5,164 for the same period this year.
- Meanwhile, the mortgage delinquency rate (borrowers 60 days or more delinquent on their mortgages) declined to 3.61 percent in the first quarter of this year, the ninth consecutive quarter it has dropped, according to TransUnion's latest mortgage report. In the past 12 months, the mortgage delinquency rate has declined more than 24 percent and is now at the exact same level as in second-quarter 2008.
- House prices continued to rise, although at a slower pace. The Standard & Poor's/Case Shiller gauge of prices in 20 metropolitan areas rose 12.4 percent in March from a year ago.
