Saturday, January 30, 2010

Another Good Economic Sign

Calculated Risk is a graybeard....and knows stuff.

Residential Investment (RI) has made a positive contribution to GDP the last two quarters, and the rolling four quarter change is moving up.

Equipment and software investment made a small positive contribution to GDP in Q3, and a larger contribution in Q4. The four quarter average is also moving up.

As expected, nonresidential investment in structures is now declining sharply as major projects are completed. The economy will recover long before nonresidential investment in structures recovers.

And as always, residential investment is the best leading indicator for the economy.

There is a handy-dandy graph at the link. It's not exactly a rip-roaring sign, but it's certainly going in the right direction.

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