The recession is not over, but one can sense Spring is in the air…
All eyes are on the US economy again right now. Rightfully so. Before people criticize that we should not be following the US economy but rather our own should know that we can not exit this recession ahead of the US, we will follow them out.
The stock market seems to be taking some solace from “less negative” news.
- Consumer spending is improving. Households are still cautious BUT this important indicator is no longer retrenching
- Car sales actually improved last month. Certainly lower energy costs are contributing here, after all US households currently spend only 1/3 of what they spent on energy just last summer
- The all important statistic of housing cost as a share of household income has fallen to it’s lowest level EVER. This is a sure sign that the bottom of the real estate nosedive is near.
- Overall inventory of homes for sale in the US are now at the long term average, signs that the market is certainly balancing
In Canada our affordability index is also at historic levels. We really get the sense that if people don’t buy in the coming months of 2009 they will definitely want to kick themselves.
