Close to a bottom? We certainly hope so, but not without a few more curves thrown our way. Let's see what has happened this week: the stock market had its best week since November, retailers have reduced inventories so when any signs of a pickup in demand will force them to restock, oil prices are up and core indicators are starting to show signs of life.
Need more proof? The Consumer Price Index appears to be stabilizing, if you call a less than expected drop to be encouraging. Why not? Retailers are practically paying you to take the merchadise and good bargains can only last for so long. Simple economics on this one: producers got stuck with too much inventory after consumers cut back dramatically last year. Now they have to cut back further to cleasr their shelves of stockpiled goods. So, the best way to reduce inventories is to sell more.
How about the behemoth industries? Fertilizer production has improved as the spring season approaches and inventory clears. Industrial metals are showing signs of better days ahead: prices for industrial copper are up 18% for the year, indicative of the metals use in construction and electronics, scrap prices are rising as companies drain their excess inventories and shipping freight rates are nudging up from hibernation. Demand for moving goods around the world is rising.
So what does this mean? Try a little dose of confidence that is sorely needed today. The enthusiasm about things improving can do a lot of the heavy lifting from the almighty consumer, who, in the end, is the biggest linchpin to getting the American economy back on track.
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