Economy moves forward on its road to recovery
Associated Press
Wednesday, January 27, 2010

Americans are feeling better about the economy, home prices are on the rise and companies are forecasting a brighter 2010.

While no one doubts the economy has a long way to go to come back from the recession, the reports Tuesday were signs of progress for a recovery that has proceeded in fits and starts.

"We're definitely moving in the right direction," said Scott Hoyt, the senior director of consumer economics at Moody's "But on the other hand, we're moving there from a very low point. And we're still at a very low point."

Consumer confidence rose in January for the third consecutive month, the Conference Board said. People said they felt better about the economy and were more willing to buy big-ticket items. The group's consumer confidence index now stands at its highest level since the financial meltdown in September 2008. But at 55.9, it's a far cry from readings of 90 or higher that indicate an economy on solid footing.

Consumer sentiment, a gauge of Americans' willingness to spend money, is closely watched by experts because personal spending fuels 70 percent of the U.S. economy.

"Confidence remains incredibly depressed," Capital Economics analyst Paul Dales wrote in a research note. "This all suggests the legacy of the recession will live long in the mindset of consumers."

Still, there are signs of progress.

Home prices rose slightly in November, the sixth consecutive month of increases, according to Standard & Poor's and Case-Shiller. Fourteen of the 20 cities in their survey notched gains from October to November. Rising prices are important to the recovery because they make homeowners feel wealthier and spend.

Corporate America appears more optimistic these days, too. Delta Air Lines said Tuesday demand for business travel is picking up. Yahoo Inc. says online advertising is finally beginning to snap out of its yearlong slump.

Apple recorded its most profitable quarter ever. And Corning says its quarterly profit almost tripled on surging sales of glass for flat-screen televisions and computers.

Auto sales, which suffered a terrible year in 2009, are expected to climb in 2010.

Most economists predict the nation's economic growth strengthened in the October-December quarter, to an annual pace of 4.5 percent to 5 percent. The government's first estimate of the gross domestic product for the fourth quarter comes Friday.

From the Wednesday, January 27, 2010 edition of the Augusta Chronicle


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