EconomicCrisis.US

Sales at U.S. wholesalers climbed in December for a ninth consecutive month, leading to an unexpected drop in stockpiles that may keep spurring orders.

Purchases increased 0.8 percent after a 3.6 percent gain in November, the Commerce Department reported today in Washington. Inventories fell 0.8 percent following a revised 1.6 percent increase that was the largest in more than five years.

A record inventory drawdown last year has opened the door for factories to pick up production, leading a recovery from the worst recession since the 1930s. Another report showed job openings climbed in December for the first time in three months, signaling employers are gaining confidence the expansion will be sustained in coming months.
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Despite its lingering ills, the U.S. economy expanded at a solid clip in the final months of 2009 and likely will continue growing in the new year. Even the double-digit unemployment rate is expected to improve by the end of 2010. One day soon, the recession will be officially declared over.

That will be welcome news, but it won’t end the pain.

The aftershocks from deep recessions reverberate for years, even decades, and take an enduring toll on everything from government finances to countless upended individual lives.

“People assume once the recession is over, people go back to work. They don’t quite get the long-lasting impact,” says economist John Irons of the Economic Policy Institute in Washington, D.C.
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Federal Reserve officials are increasingly confident the U.S. economic recovery will be durable, but do not see employment or inflation picking up soon, minutes from their November meeting showed.

Senior Fed officials, meeting on November 3-4, also expressed concern their plans to keep interest rates low for a prolonged period could have negative repercussions, including possible speculative activity in financial markets.

“Most participants now view the risks to their growth forecasts as being roughly balanced rather than tilted to the downside,” according to the minutes, which were released on Tuesday and were accompanied by upward revisions to policy makers’ growth forecasts.
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Sales of existing U.S. homes jumped 10 percent in October to the highest level since February 2007 as Americans rushed to take advantage of a tax credit, cheaper properties and lower mortgage rates.

Purchases rose more than forecast to a 6.1 million annual rate from a 5.54 million pace in September, the National Association of Realtors said today in Washington. The median sales price decreased 7.1 percent from October 2008.

Stocks extended gains on signs the industry at the center of the deepest recession since the 1930s may contribute to a recovery. The extension of a tax credit originally due to expire Nov. 30 and its expansion beyond first-time buyers may fuel further gains in home sales, helping to overcome the drag from rising foreclosures and unemployment.
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