Sept. 27 - The U.S. economy grew at a slower pace during the spring than previously thought but there are still reasons to see the economic glass as half full than half empty. Conway G. Gittens reports.
REPORTER STAND-UP: CONWAY G. GITTENS (REUTERS) ENGLISH: You may not be able to see it from the busy streets of New York, but the U.S. economy is slowing. Second quarter growth was downwardly revised. Yet there are five silver linings to this slow-growing economy. No. 1 Wallets are still open: A pick-up in consumer spending during the second quarter outpaced total economic growth. And consumers are poised to spend for things they like or want- just look at the long lines for the Apple iPhone 5. No. 2 The job market is still breathing: Jobless claims are at a two-month low and for the first time in over a month the four-week moving average is down. GreenCrest Capital's Max Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST/SENIOR ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "The jobs situation here is lousy but it's not terrible. So it's not worsening. We are seeing 100(000)-150,000 new jobs a month. We do need 120,000 each month to keep up with population growth." No. 3 Housing is rebuilding: Signed contracts to buy previously owned homes slipped in August, but sales are up year-over-year for both new and existing homes and more importantly, prices are too. SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST/SENIOR ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "We're seeing upward revisions in house values, which do make people feel better, which normally does allow them to go out and spend more money with more confidence and it has a wealth effect." No. 4 Corporate profits are up: Way up. After-tax profits for U.S. corporations were double previous estimates and almost twice the level of the overall economy in the second quarter; cash waiting to be put back to work. And No. 5 If all else fails there's Super Bernanke. SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST/SENIOR ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "In a weird way with the Fed on standby and committed to QE3, QE4, whatever it takes, then you might actually begin to interpret negative macro news as either a non-event or a slight positive. In other words, we'll get more inflationary, expansionary monetary policy." But even optimistic economists concede all these hopes could be dashed if a weakening global economy takes a bigger bite out of the manufacturing sector - like the plunge in August orders for durable goods, or if Washington pushes the economy off the fiscal cliff in January with mandatory spending cuts and tax hikes. Conway Gittens, Reuters