Many reports are coming out that 2010 finished strong and the economy is in fact improving. In December, the unemployment rate dropped 0.4% to 9.4% the lowest it has been since July 2009. The U.S. Commerce Department reported that factory orders rose 0.7% in November the largest increase in eight months. They credit this report for being the cause of the dollar rising higher than the euro and yen in the first week of January 2011. The dollar has steadily fallen against both of these currencies since early last summer. Reports also indicate that consumer spending was up in December 2010 compared to December 2009.
So are these reports to make us believe things are on the rise? I'm not sure the economy is on the rise but I can tell you what is? Gas! The national average for a gallon of regular is $3.089 as of 1/10/11 up from $3.052 a gallon on 12/27/10. Crude oil is trading at $90.81 a barrel with forecast predicting it will be $105.00 a barrel by the end of the year. Some people predict $5.00 for a gallon of gas by 2012.
Another thing on the rise is foreclosures. RealtyTrac reports that the number of properties foreclosed on in 2010 was 1.05 million, a new record. 69,847 of those foreclosures were in December alone. Home values have fallen 26% since their peak in June 2006, which is a bigger decline than that which was seen during the Great Depression years between 1928 and 1933. Home values are expected to continue falling in 2011.
I think the people in Washington D.C. want us to think the economy is getting better but we all know that high and rising gas prices do not help improve the economy. Neither does the fact that people are still losing their homes and while reports show a dip in the unemployment rate and increased hiring, you can quickly come to a different conclusion if you are out trying to find a job.
What are your thoughts on this? Do you feel the economy is improving?