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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Despite layoffs/oil prices 2005 OK


2005 proved to be a good year for the US economy.

Despite headlines of mass redundancies at companies like General Motors, high oil prices and continued fears over US pensions, the economy grew at a faster than expected pace with strong job growth.

2006 is set to be a year where all eyes will be on the US Federal Reserve which is set to stop raising interest rates.

In 2005, the economic headlines were dominated by the price of oil, which was expected to hit the economy and the consumer hard.

And after Hurricane Katrina, economists braced themselves for a downturn.

But the US economy held firm....

So after an icy start, the US economy really picked up steam in late 2005.

At the beginning of 2005, many economist thought the US economy was skating on thin ice, but New york has recovered well from the shocks of the 2001 and so has the US economy generally with GDP growing above trend at 4 percent and 5 percent.

Part of the reason the American consumer has continued to spend is the continued boom in housing in 2005

Laksman Achuthan, Economic Cycle Research Institute, said, "If you've been a home owner, you've had some distraction in a positive way.
Basically if you have been lucky enough to own a home during much of this while, you've seen a lot of negative headlines, and while you've seen things like energy or food prices spike up, you've also seen the value of your home spike up, and this wealth effect - even if you don't touch the money - you feel like it is savings in the bank account...(it) has an impact on you that allows you to still live the life you were living the year before."...