34 Numbers to Make You Believe in Growth

In honor of the greatest pitcher of all time, here are 34 underappreciated economic data points. Photo by the author.

When the third estimate of Q2 US GDP hit Thursday and growth wasn’t revised up, some headlines seemed a little sad. They said “sluggish” growth portends a “rockier second half.” It’s rather par for the course for this entire expansion—headline growth is lackluster, and folks fret a weak US as a result. Yet under the hood, things look stronger. Many folks can’t fathom just how far the US private sector has come since 2009—and that private sector strength is what’s driving stocks. Investors who can grasp the US’s underlying strength—who understand reality is better than most appreciate—will be well-positioned as this bull market continues. Here are 34 numbers to give you a head start.

$1.3 trillion: The amount total GDP has grown since the recession.

$683 billion: How much higher GDP is today than at the pre-crisis peak.

$192 billion: The amount federal, state and local government spending and investment has fallen since the expansion began.

$283 billion: The amount business investment has risen over the same period! This more than offset government cutbacks.

0.1%, 1.1% and 2.5%: Annualized GDP growth in Q4 2012, Q1 2013 and Q2 2013.

-0.07, -0.82 and -1.13: Percentage points falling government spending detracted from headline growth in each quarter. Without this government drag, growth would look stronger.

27.3%: The amount M2 money supply has grown since the recession ended—an anemic pace compared to the doubling of the monetary base over the same period. That the US economy has eked out ok growth even as the “stimulus” from quantitative easing hasn’t circulated is a testament to the private sector’s underlying strength.

67 bps: Amount US banks’ average net interest margins have fallen since 2010 began—banks’ incentive to lend has eroded with potential profits. The US is growing despite this—and growing despite, not because of, QE. When QE ends, net interest margins should widen, providing true stimulus.

$1.43 trillion: How much disposable personal income has risen since the Q2 2009 bottom.

$460.9 billion: Increase in the annual rate of exports since the Q2 2009 bottom.

$525.3 billion: Increase in the annual rate of imports since the Q2 2009 bottom—a sign of rising domestic demand.

3.15%: US banks’ nonperforming loan ratio as of Q2 2013—cut in half since 2010. Balance sheets are getting healthier.

0.72%: Current charge-off rate on all US bank loans—down from 3.16% in October 2009 and in line with pre-crisis norms.

$371 billion: Total consumer and industrial loan growth since lending bottomed in October 2010—total lending is now a hair below the 2007 peak.

$264,400: The median sale price of all houses sold in the US in Q1 2013—a new high. Housing is recovering!

35,000: New homes sold in the US in August. Home sales are inching closer to pre-bubble norms.

$1.8 trillion: Total liquid assets on US nonfinancial corporate balance sheets as of Q2 2013—fodder for future buybacks, M&A and growth-oriented spending.

$1.7 trillion: Total after-tax corporate profits as of Q2 2013, lest you think firms are hoarding cash because they aren’t making money.

7.45 million: Total private-sector jobs created since labor markets bottomed in February 2010.

1.78 million: Number of people who’ve joined the labor force over the same period—confounding fears of a shrinking workforce.

338,000: DROP in the number of “discouraged workers” over the same timeframe. Fewer folks believe no job is available—another sign of labor market improvement.

20, 18, 20, 24, 27 and 29: Amount, in basis points, the US yield spread contributed to LEI’s growth in each of the past six months. Note the rising increase since the spread started widening in earnest in May—steeper yield curves are great for growth.

83 bps: Amount the US yield spread has widened since 2013 began.

14: Consecutive quarters of S&P 500 earnings growth, through Q2 2013.

6: Consecutive quarters of falling petroleum imports—a benefit of the shale boom. Domestically sourced energy is typically cheaper due to the cost of cross-border transportation.

These numbers are all publicly available—anyone can find them at the BEA, BLS, Federal Reserve and Energy Information Administration. However, they aren’t widely appreciated. Investors remain preoccupied with the more lackluster headline data points. At some point, sentiment will start improving, and as investors gradually become more aware of how strong the economy is, they’ll gain more confidence in future corporate earnings—and they’ll pay more and more for a share in those earnings, pushing stocks higher. That sentiment remains dour for now tells you this bull has room to run.