Economic Recovery: Signs To Watch For

Trying to determine whether or not the economy is truly on the road to recovery can be confusing. There are several different reports that consumers can check, but not everyone knows what to look for. Here’s a closer look at a few important statistics to keep an eye on.Economic-Recovery-Signs-to-Watch-For-278x300opens IMAGE file

Housing Starts

Housing starts refer to the number of residential properties that construction has started on within a given period. The higher this number is, the healthier the housing sector is considered to be. A strong housing sector would indicate that the economy is recovering.
The July 2014 numbers provided by the United States Census Bureau show that single-family housing starts were at roughly 656,000. This is an increase of 10% from July 2013, but it’s 50% lower than where it typically should be at in a healthy economy.

Consumer Price Index

When consumers purchase goods and services, the economy tends to become stronger. The Consumer Price Index measures inflation and focuses on whether or not consumer prices have increased or decreased overall and by how much. In general, if the CPI increases more quickly than wages, consumer spending tends to decrease.

The CPI for August 2014, excluding the costs of food and energy, hasn’t changed, which is the first time this has happened since Oct. 2010, according to the Bureau of Labor Statistics. If the CPI remains somewhat steady, consumer spending could boost economic recovery.

New Residential Sales

While the sale of new homes doesn’t make up a large part of the Gross Domestic Product, all of the spending that goes along with it, such as furniture purchases, can have a bigger impact on the economy and help it recover.

The August 2014 New Residential Sales report released by the Census Bureau showed that new single-family home sales went up by 18% from the previous month and increased by 33% since August 2013. This indicates that this segment of the housing market is making a recovery.

  • consumer price index,
  • economic recovery,
  • home sales

Comments are closed.

Accessibility Tools
hide