- Record low natural gas prices are propelling manufacturing. The EPA couldn't react fast enough to restrict fracking to kill of this particular goose laying golden eggs and it got too close to the election, so Obama watered down proposed EPA rules. This fact [low natural gas prices] has unleashed the biggest US manufacturing boom in decades. Take for example the US steel industry. Reuters News reported that, "America’s steel industry, for decades a symbol of industrial decline, is betting on natural gas to make it more competitive against foreign producers.
- U.S. oil production on private land is way up, particularly in North Dakota, far outstripping Obama's shutting down of Gulf oil production and closing off federal lands, later re-opened. From the WSJ: The use of new drilling techniques to tap oil and gas in shale rocks far underground helped add about 158,500 new oil and gas jobs over the past five years, and economists think it has created even more jobs in companies supplying the energy industry and in the broader service industry.
- Manufacturing in the U.S. is making a comeback. From the Carpe Diem blog: More than 17% of U.S. job growth this year has been in manufacturing, even though that sector represents less than 9% of total payrolls. Further, manufacturing jobs that have gone to China have been returning to the U.S. U.S. manufacturing has become attractive for some companies as Asian wages have surged over recent years and the wage gap between the U.S. and China has narrowed. The drop in the dollar over the past decade has also made U.S.-produced goods more competitive. And higher oil prices have increased the cost of shipping goods across oceans, making domestic manufacturing more appealing.
- The Gallup survey of Economic Confidence has hit a new high. The Gallup Economic Confidence Index broke through a barrier last week, surpassing -17 for the first time in the four-plus years of Gallup Daily tracking in the United States. The index now stands at -16 for the week ending May 20, up from -18 in each of the prior two weeks in May, and from -21 in late April. However, the index is still negative.
The open question is whether this good news will lift the U.S. economy and if Obama will get any credit. I contend that he should not, because the health care law, his energy policies and refusal to deal with federal spending have all harmed the economy. The American people are pragmatic and tend to give the leader credit when things are going well.
Uncertainty over health care and the regulatory climate are still holding back a full recovery. It's an open question as to whether economic bulls or bears will triumph.