We’ve been hitting on this idea A LOT lately, that the economy physically can’t get much worse, since such crucial parts of the economy are near a natural rock bottom.
Anyway, this is becoming uber-trendy.
Here’s Citi’s Steven Wieting on the subject:
Auto sales have risen in the past few months despite very weak consumer confidence. And why not? The level of car and light truck sales per household is still below readings associated with post-war recessions. Given the low sales pace of recent years, an estimate of the average age of the U.S. vehicle stock is approaching a rusty 11 years.
Since recessions typically begin with declines in home building and consumer durable sales, a combined measure of such activity is closer to the lows of 2008/2009 downturn than the highs of the last cycle. In the case of single-family home construction, activity is closer to the lower bound of zero. As such, the U.S. economy currently conforms more closely to the lay person’s definition of recession (a period of weak activity) than a recovery/expansion – technical definitions that follow a recession’s end.