Factory Orders up For Fifth Time

" The top of the hour that in the pit increase in six months. It's another sign -- economic recovery bring in Brian Levitt from Oppenheimer Funds. Yeah chief economist Brian it's fine but it cavity again thank you very much. All right so I SM looked pretty good the factory orders the better than expected we've had some other positive data we had a GDP number three and half percent two Q3 Q. Is this the beginning of -- longer recovery or may be just a short recovery in what's going to be secular bear economy."

" Well I think that this is. What you're saying it is a short recovery in the economy I don't think that we don't to a secular bear period for the broader economy but it's more of a grinding recover and when you have. Three and a half percent GDP growth given the levels that -- that we still need you know over a year's worth of that type of growth to get back to where we were so. You know what you see from the national manufacturing numbers and you know today's factory orders are companies having to put some new inventory back on the shelves. That's good news that leads the manufacturing being an expansionary territory but we suspect you're an Oppenheimer Funds that that starts to grind to a more to a more modest level."

" Okay yeah and what concerns me a lot of these numbers I SM factory orders. They may or may not be temporary in inventory restocking an -- not be stimulus related. The biggest -- point for me and tell -- if you agree -- this is consumer confidence still down in the -- if -- track consumer confidence. And the unemployment rate they tend to track. Together if these economic data points are increasing. Why is the competence or lack of for the US consumer still in the tank."

" Well I think you hit it on the market in the consumer confidence numbers that you know a lot of these surveys are going to deal would what do you think about current employment situations. What are your expectations on future employment situations and as long as Americans keep hearing that the unemployment rates going up. They're going to be concerned about their own job won't go out and spend at the levels that we hope now the good news is. The job market has improved pretty significantly -- no longer are we losing 700000 jobs in a month we're losing something like 260000. -- we're still losing jobs still losing jobs absolutely -- national manufacturing -- data is consistent with job growth. By the beginning of 2010s so you will see it peak in the unemployment rate which should start to help some of those consumer confidence numbers particularly for the 8788%. Of Americans you know the Bureau of Labor Statistics we'll say 90% of Americans that survive this recession with the job. That does help on the margin for consumption but as we know -- deal leveraging environment households or tighten their belt we don't shop like we did promote -- 07. But of peak in the unemployment rate will psychologically have a big impact on US consumer."

" And we need to see technically do we not we need to -- two quarters of positive economic growth and if you go back and look at some of the previous recession that we had. Many of them have had a quarter of growth they'd be you know they had this anomaly quarter and then back into -- I'm not trying to be overly I don't -- glass half of the Solomon. But the same time just because we had one good quarter correct does not mean we're out of the economic woods exactly and and a lot of that is."

" Does have to do with the subsidies being provided for cash for clunkers in the government spending. I think a lot of that's why the American recovery and reinvestment plan. Really was designed as a time released hope for the economy you'll see government spending whether it's the infrastructure build renewable energy projects. In the twenties and into 111. You have some weakness on the dollar that does help support exports and businesses are flush with cash so you really hope you get some private business investment. We know 70% of its economy -- the consumer on the margin you should see some improvements again once unemployment -- psychologically that's important for consumers. But this is by no means a robust economic environment mean. This is not 1980 to 1982. -- interest rates were heading down tax rates were heading down. Baby boomers are entering the workforce and mass today. Interest rates are only going one direction taxes are only going up. The baby boomers are ours are starting to head in towards disarmament so it's not the next great secular bull. But the economy should continue to post some growth will fourth quarter be a positive or negative GDP -- I expect the positive growth number in in GDP in the fourth quarter. Not as strong as we saw on the third quarter but a lot of that's going to continue to be based on. This government spending positive net exports. It's not the 70% regularly economy that you want driving it but before we go because there was -- Give us the one big reason to be optimistic right now want to be optimistic case what's our number one argument. I think the number one argument is how how productive companies have been through this recession. Rights of companies continue to build the productivity they've come a very long way. In in pairing off excess costs are are lowering bottom line expenses you're seeing global growth picked up. You know US and 500 companies are going to generate more than 50% of their revenue from overseas so we're -- improve corporate profitability. Period often very depressed levels we're starting to see some signs of a businesses needing to put some workers back on hopefully positive job growth as we head out at that point -- By Brian Levitt chief economist at Oppenheimer Funds Brian is a pleasure thank you so much thank you very much I think -- I don't know."