2012 really is shaping up a lot like 2011 did.
Both started out strong (economically and market-wise). And then both had swoons where everyone started talking about a double dip.
But the US economy has a trump card: There are huge secular trends that are mostly impervious to these medium-term swings.
Last year the big, secular uptrend was the car industry, which had a monster summer and fall.
Here’s a chart of annualized monthly motor vehicle sales. You can see how they really started taking off in July 2011.
This year’s big story is increasingly looking like it’s going to be housing.
As we wrote about earlier this week, the latest Case-Shiller report made a convincing case that the housing bottom (at least price-wise) is in.
Other measures are up too. Pending home sales, housing starts and so forth are in big uptrends.
Here’s what we wrote earlier this week after the Case-Shiller housing news….
- 19 out of 20 cities saw gains.
- 18 out of 20 cities saw an improvement in annual returns.
- There were no cities where house prices hit brand new lows.
What’s more, it’s not just this housing index that’s showing improvement.
Other indices such as the FHFA House Price Index have shown gains as well.
Furthermore, other non-price measures of housing are looking good. New Home Sales have hit a 2-year high, for example.
Today the homebuilder stocks are having a monster day, in part because KB Homes predicted a return to profitability in Q4, and a full-year of profitability next year.
The stars are aligning for a turn to happen, and if it does than the improvement to one of the worst parts of the economy will save the year.
SEE ALSO: Housing is booming all over the place >
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