Looks like it is getting healthier. Do you agree with the news?

Last week the Commerce Department reported the Gross Domestic Product (GDP) for the 3rd Quarter. As you can see from the chart, GDP rose by 3.5% for the first gain in a year and the strongest reading in two years.

While most media outlets were giddy about the news and started the hype that the recession is behind us, it's important to remember that there's more to the economic data than just the headlines.

The temporary "Cash for Clunkers" program has now expired, but was a big part of last quarter's GDP gain. If we remove it from the total, the reading would have been a more modest 1.9%. But there is even more to the rise in the latest GDP number that is just temporary...

Also bolstering the economy has been the $8,000 first-time homebuyer tax credit - which is set to expire at the end of this month. Many home buyers have been taking advantage of this program - and wisely so.

New Home Sales were reported last week, showing a 7.5-month supply of inventory. While that number is slightly worse than last month's 7.3 reading, it's still a big improvement from where we were in January. Back in January, inventory levels reached a high of 12.4-month supply! The improvement in housing inventories has been due in large part to the $8,000 First Time Homebuyer Tax Credit, which is set to expire on November 30.

There is a real possibility of an extension of this program through a proposed Bill, but it is not yet a certainty. The extension Bill still must be reconciled between the House and Senate, and then voted on for final approval. Under the current extension proposal, sales with signed purchase agreements by April 30th that close before June 30th, 2010 would qualify for the credit.

Another bit of news was the UCLA Anderson Forecast: "Recession likely ended this quarter"
In that report there is this line...

"Credit-impaired lower-income consumers can't spend the way they used to, and wealth-impaired affluent consumers won't,"

The Anderson Report further says that this Qtr marks the end of the recession.

Well now we all feel better knowing that this is the low point. Right? There are signs of activity. Some very good things. Maybe this is the low point and we are bout to begin the long slog back to normalcy.

Not the wild growth of the recent past but healthy productivity! We all will welcome that.

IMHO Keith