When you’re a kid, time moves slowly; an hour seems like a long time. Maybe that’s why as we headed down the long stretch of highway between Northern California and Los Angeles for our annual summer vacation to visit the grandparents and Disneyland, my sister and I would ask our dad in a whiny voice filled with despair, “Are we there yet?”
I don’t know why he would get so upset every time we asked this question. Maybe it was because we asked it every five minutes, or maybe it was because the answer was obviously “no” because the car was still moving.
Needless to say, it has been a long, slow trip for the U.S. economy as we travel the road from Recession to Recovery. There have been signs, however, that assure us we are headed in the right direction.
- The stock market has more than recovered: Both the S&P 500 Index and the Dow Jones Industrial Average soared to record highs in 2013.
- Corporate profits are at all-time highs, industrial production is picking up and third quarter 2013 GDP grew at a healthy rate of 4.1 percent.
- The unemployment rate improved to 6.7 percent at year-end 2013, down from 9.7 percent at year-end 2009, but still above the 5.0 percent at year-end 2007.
- The single-family housing market recovery kicked into high gear in 2013 with solid increases in sales of existing homes and sales prices. Construction starts are still below normal levels, but they were up almost 30 percent last year, and the sector is expected to maintain that momentum in 2014.
- Small business owners increased employment by an average of 0.24 workers in December, the best number since February 2006, according to the National Federation of Independent Business. A very encouraging sign, considering the small-business sector represents roughly half of the private-sector economy.
- The U.S. federal budget deficit is shrinking and presently less of a drag on the economy. For fiscal year 2013, the federal deficit was $680 billion (4 percent of GDP), much improved from 2009’s peak of $1.4 trillion (approaching 10 percent of GDP).
However, despite the spate of good economic news, many individuals and parts of the country are lagging in the recovery.
So, are we there yet? As my dad would tell my sister and me, “No. I’ll tell you when we’re there. But we are closer than the last time you asked.”
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Larry Gray is editorial director of Institutional Real Estate, Inc.
