Here are some tidbits from this week’s Economic Commentary, published by the Economics Group of Wells Fargo Securities:
- As discussed in an earlier report, GDP growth was reported at 3.2% for the first quarter of 2010;
- Real estate markets are starting to hold steady, but value losses created by the crash of the housing bubble still permeate. The Charlotte area, the only North Carolina metro included in the S&P/Case-Shiller City Composite studies, is still down 14.6% from its peak aggregate value. This is better, however, than the overall composite averages for targeted metros (30% decline).
- The ISM Manufacturing Composite Index rose in March to 59.6, with a 12-month average now standing at 51.8. Both stats trend toward growth in the maufacturing sector, as compared to significant recent downturn (not necessarily an indication of a complete rebound, but a shift in direction).
- Nonfarm productivity in the 4th Quarter of 2009 was up 6.2% on an annual basis; an indication of significant efficiency gains necessitated by a shrinking workforce for many businesses and industries.
- National nonfarm employment did grow by a net 162,000 in March, the first real significant increase since the first half of 2007. A significant share of this increase, however, is tied to jobs created by the Census and growth in temporary labor.
Also included in the commentary is an examination of the fiscal crisis in Greece and other European nations. Currently, the U.S. Federal Government debt (not including unfunded liabilities) is approximately 80% of our GDP, on par with Portugal (another European nation currently experiencing a credit downgrade). According to the report, if the Federal Government were to reduce its spending sufficient enough to stabilize its debt-to-GDP ratio, the impact to the Federal Budget would be a reduction equal to about 7% of GDP (Total Federal Spending for 2010 is estimated at 25% of GDP).