Index merry this holiday season
As shown in the accompanying graphic, July was a very strong growth month for the local economy and was followed by August and September growth rates that were only slightly less positive. The average weighted growth rate for the seven economic statistics used in my index was 46 percent in July, 25 percent in August and 14 percent in September. May was 17 percent. We haven't seen growth rates like this since the early 1990s. Even the rates of the late 1990s were weaker than recent ones. The decline in growth rates started in 2001 and bottomed in late 2008-early 2009.
I don't expect these strong growth rates to persevere and the forecast for 2012 in the graph is too optimistic. The growth rates in the seven statistics are year-over-year changes and it is unrealistic to expect 20-plus percent growth rates to continue. The currently strong 2011 growth rates are the result of negative growth rates in the second half of 2010, so 2012 growth rates are likely to be closer to zero because of current strength in the economy.
But the bottom line is that our economy is