Rising energy costs appeared to be jeopardizing the economic recovery for a while, but there has been more than a little good news in the past week.
The U.S. trade deficit unexpectedly narrowed during September, The Financial Times reports not in spite of energy costs but, paradoxically, partly because of them. As the article explained: "Despite a 3.5 percent rise in the price of energy per unit, the total import bill fell ... due to a 10 percent decline in volumes."
Faced with substantially higher prices, in other words, Americans did the rational thing they conserved.
In addition, there was a substantial increase in exports particularly of semiconductors, computers and food. The trade deficit was about $2 billion lower than the consensus estimates and, The Financial Times says, that "could lead to an upward revision to economic growth in the third quarter from 3.7 percent to 4 percent."
Meanwhile, cbsmarketwatch.com says domestic retail sales rose in October by nearly a full percent, not counting car purchases. Significantly, much of the increase seemed to be on non-essentials at retail clothing stores, bars and restaurants, for example. That, it seems to us, is a sign of increasing prosperity or at least confidence in the economy.
Also, in what one economist called "an unquestionably stellar report," cbsmarketwatch.com said 337,000 non-farm jobs were added in October, about double the number expected. Despite the recession that began before he took office, it now appears there will be positive job growth during President Bush's first term.
In addition, wholesale inventories increased only slightly during September. That, cbsmarketwatch.com says, is good news because it means more production may be needed to keep up with demand in the fourth quarter.
These developments, during a time of growth in the stock market, are more reason for optimism about the future.
The Florida Times-Union (Jacksonville, Fla.) - Nov. 14
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