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Manufacturing-Led US Economy At Last, But Don't Count On It!
Monday, May 02 2011 | 03:45 PM
NEWOAK CAPITAL LLC
|Be careful what you wish for, you might just get it. Most economists prefer a more manufacturing-based US economy vs. a service and consumer dominated one. Well, it took a credit bubble, economic crisis and Dollar falling to get there. While we all feel poorer, manufacturing growth has been a positive factor keeping the economic recovery alive. However, this has been primarily driven by foreign demand, a cheap Dollar and some increased corporate spending,
Japan's natural disaster has introduced a few bottlenecks but China and Brazil have helped to more than balance that. If this continues, the general hope is gradually the unemployment will adjust to a more normal range. We may even get back some of those folks that had given up on the job market. Of course, the residential and commercial real estate markets will be key to the ultimate health of the economy. By then, we may even be tempted to regain some of our old bad habits and let others produce and save while we enjoy consumption.
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