With America’s $16 trillion debt load, gridlocked political system and dreaded fiscal cliff of tax hikes and spending looming at the start of 2013, investors can be forgiven for wanting to curl up in the fetal position. Despair not: There’s actually quite a bit of solid economic data suggesting better times ahead. Here are five reasons to be hopeful about the New Year:
- Consumer Confidence: The Conference Board’s Consumer Confidence Index advanced to a better-than-expected 73.7 for November, vs. 73.1 for the prior month. We’ve come a long way from Great Recession when the index averaged 53.7.
- Black Friday: The National Retail Federation reported that spending in stores and online during the four-day Thanksgiving holiday that started on Nov. 22 rose 13% to $59.1 billion. Not everyone thinks the trends will continue throughout the entire holiday shopping season, but it’s a promising start.
- Capital Spending: The Commerce Dept. just reported that bookings for non-defense capital spending (excluding aircraft) rose 1.7% in October. That’s the best showing since May.
- Housing Recovery Part I: The S&P/Case Shiller index of property values increased 3.6% in September compared with the year-ago period. What’s more, prices are up 7% through the first nine month of 2012. That’s the best performance since 2005.
- Housing Recovery Part II: After years of being a drag on growth, the housing sector is actually making meaningful contributions to GDP. The Wall Street Journal noted that housing should kick in 0.4 percentage point of the 1.4% in GDP growth forecast for the last quarter of 2012, citing Macroeconomic Advisers.