The international trade figures for October were released on Friday by the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The trade gap for October plunged $5.9B from its revised September level and exports grew $4.9B while imports edged $0.9B lower. AIM program director, Dr. David Krause said, "While this is only one month in the Q4 '10 figure, it does indicate that the GDP growth rate could be much stronger than the 2.5% most economists are projecting - and that the real number might end up being closer to 3.5% growth for the final quarter of 2010."
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| Source: Wells Fargo Economic Group |
On Tuesday it was reported by the Commerce Department that U.S. business inventories continued to rise in October, increasing 0.7% -- led by increases in manufacturing and wholesale inventories. September’s inventories also were revised upwards to 1.3% from 0.9%. The 3-month average inventory increase was over 12%. Dr. Krause commented, "Hopefully the strong holiday retail sales season will eat through the inventory and that business inventories will continue to expand - and maybe the employment numbers will improve."
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| Source: Wells Fargo Economic Group |
The U.S. Labor Department said today that industrial production rose 0.4% with solid gains in machinery, computer & electronics and utility production. Over the past year production is up 5.4% an capacity utilization is up with gains in manufacturing and utilities. Krause said, "U.S. industrial production is growing at its fastest pace since July. I believe that this helps to support the case that our economy is accelerating and recovering at a faster rate than forecast. The news continues to be quite favorable for manufacturing. Hopefully this continues to add to the growing level of consumer confidence too."
Dr. Krause concluded, "I think that the U.S. economy is settling into a solid, but not spectacular period of moderate growth. It is possible that GDP growth next year could be 3.5%+. Our manufacturers are increasing output, prices remain in check, and the holiday retail sales numbers continue to impress. And it looks like President Obama and the Congress are going to give Americans another $200 billion stimulus with the tax compromise. Let's hope this favorable trend continues and that employment begins to improve in 2011. This is quite a turnaround from the doom and gloom that was being spun by politicians preceding the November elections."
