By Donn Eurich, Executive Director

Our Democratic political leaders tell us things are getting better, the recession is over and prosperity lies directly ahead. Our Republican leaders point to even higher unemployment, uncontrolled government spending, failed economic incentives and claim things are going to get worse before they improve. Who is right? Maybe we should rely on actual economic indicators instead of politician’s promises.

Economic indicators will tell the true story right? Steadfast, unquestioned, indisputable facts and figures from our government. Well, lets take a look at some of those statistics and see what story they tell us:

 Retail & Food sales for December, 2009, seasonally adjusted; down 0.3%, from November, but 5.4% above December of 2008. I think overall, that’s good news.

 December 2009 gasoline station sales were up 33.6% from December 2009. That’s good news, right? Well, maybe, does that number represent actual gallons sold or inflated revenue due to per gallon price increases?

 Real Gross Domestic Product (GDP), which represents the output of goods and services produced by labor and property located in the U.S. increased at an annual rate of 2.2% in the third quarter of 2009, when compared to the second quarter of 2009. Of course, in the second quarter, Real GDP decreased 0.7%. Growth is good, but aren’t we simply gaining back what was previously lost?

 Taxes on corporate income increased $15.1 billion in the third quarter, compared with an increase of $35.6 billion in the second. Profits after adjustments increased $117.3 billion in the third quarter compared with an $8.2 billion increase in the second. That’s probably okay, right? Well, don’t forget that dividends, much of which supports retirees and small investors, decreased $6.1 billion in the third quarter, after decreasing $62.1 billion in the second. Oh, so government is taking money from small investors to make business pay more taxes.

 Sales of new, one-family homes declined 7.6% below November, 2009 sales and is 8.6% below the December, 2008 sales level. There is currently an 8.1 month supply of homes for sale at the current sales rate. Hmm. This can’t be good. Housing starts are always a good indicator of economic health. Wages and salaries increased $16.1 in November, compared with an increase of $3.2 billion in October. Goods producing industries and manufacturing payrolls also increased in November, after declining in October. More disposable income for workers. That has to be good!

There are hundreds of economic indicators which measure different components of the economy, including production, employment, housing and income to name a few. If any analyst selectively picks the indicators which support the trend they claim is occurring, a convincing argument can be made. Unfortunately, as shown above, most economic indicators are inconsistent in the story they tell. Therein lies the quandary of our current economic state. While one would like to believe there is a pent up demand for goods, services and equipment, the lack of revenue growth does not justify increasing your spending at this time. With few indicators pointing toward an immediate economic turnaround, prudent spending, expense management and creative marketing will remain the priorities for the foreseeable future.