Strange assertion from the L.A. Times today, as some new construction and manufacturing data comes out:
The economic recovery is happening at a very slow and not especially steady pace, according to new indicators that include construction spending sliding to a 7-month low and ever-so-slight improvement in the manufacturing sector.
Construction, given its exposure to the cratered housing market, should really be viewed off to the side of the rest of the data. The real meat of the matter is in manufacturing:
The factory outlook was more optimistic, though not by much. An index on the manufacturing sector from the Institute for Supply Management was up to 53.4 in March from 52.4 in February.
Any level above 50 – which production facilities have managed to maintain for more than two and a half years – represents growth. Fifteen of the 18 industries in the survey, including apparel, machinery and transportation equipment, reported overall expansion.
That might not be impressive, but it is steady — and it has been since the recession began to fade in the official data. And you can understand why production has been restrained: consumer demand has been low, and the last thing manufacturers want is to introduce excessive new capacity or build up inventories too high.
In any case, combined with a (slowly) improving job market, this level of production should support U.S. GDP growth in the 2.5-3.5 percent ballpark. In fact, if Friday's employment report from the BLS continues the trend of showing that the economy is adding jobs, we could see another few tenths of a percentage point shaved off the current number, which stands at 8.3 percent.
I realize this is a bit of semantic dispute, but steady is steady, even if it's more sluggish than a lot of people would like.