What's the State of the Economy?

Halloween's over and with it the scary season. Some would say the scary season of the bad economy is coming to a close as well. How true is this? Well, it depends on who you ask because if you're struggling financially, there's no doubt that you're going to be pessimistic about the overall economy as well. But there are some encouraging signs that the economy is coming out of its slumber. This is good news for retailers who are probably a bit worried about the spending habits this coming holiday season.

Let's look at some of the major indicators. Last week it was revealed that the Gross Domestic Product went up 3.5%. Given that a recession is defined as two negative quarters for the GDP, it would appear that the GDP is a great indicator of our new fiscal health. Still, there are those who argue that the GDP isn't that great of an indicator, and may not mean that we're in a recovery mode, just that we're effectively treading water. However, there is some evidence that we're entering a recovery as well.

In addition to the GDP, there is also evidence that manufacturing is on the upswing:

"A key index of U.S. manufacturing activity jumped in October, reaching its highest level in three and a-half years, a purchasing managers' group said Monday."

Hear the sound of hammers when you leave the house--it's true, manufacturing is ramping up again, in both property and other sectors. In a similar vein, here's this news from the housing market:

"Separately, a forecasting gauge of housing-market activity rose far more than expected in September as first-time homebuyers rushed to sign contracts in time to collect government tax credits originally scheduled to expire this month."

Given that the collapse of the housing market was the main reason behind the current economic stability, the health of the housing market is a pretty good litmus test of the economy overall. Are we out of the woods yet? No, but there's light at the end of the tunnel. Yes, this is a mixed metaphor. While we're not in a full-blown recovery, several indicators do suggest we're headed in the right direction - albeit slowly.

One of the positive things to come out of this economic uncertainty is that people may be much more careful about their finances - even if we enter full recovery mode. As always, Savings.com is a place to save money in both a good and bad economy. Even a millionaire likes a sitewide code.

What about you? Do you see evidence of a recovery? Do things feel a bit different in your neck of the woods? Let us know in the comments.