War in way of economic recovery

March 18, 2003
A slow but steady economic recovery in the United States may be getting underway, but it will remain in low gear until war in Iraq is concluded, according to Eli Lustgarten, managing director of financial investment firm H.C. Wainwright & Co. Inc. Lustgarten said that despite conflicting signals earlier this year, the stage has been set for an economic recovery to start this year and pick up speed
A slow but steady economic recovery in the United States may be getting underway, but it will remain in low gear until war in Iraq is concluded, according to Eli Lustgarten, managing director of financial investment firm H.C. Wainwright & Co. Inc.

Lustgarten said that despite conflicting signals earlier this year, the stage has been set for an economic recovery to start this year and pick up speed in 2004.

"There are a lot of cross currents, but on the whole platform of things, the economy is getting better, not worse," Lustgarten said.

For example, retail sales fell 1.6% overall in February, followed by major drop-offs in auto sales: General Motors' sales fell 19%, DaimlerChrysler's dropped 4%, and Ford Motor Co.'s stayed flat. However, Lustgarten noted that the U.S. Gross Domestic Product (GDP) growth overall is increasing, noting that GDP in the fourth quarter last year was revised upward by the Commerce Department from 0.7% to 1.4%.

Another key is that industrial output and inventories are growing, albeit at a very slow pace. Industrial production rose 0.8% in January and 0.1% in February, with inventories rising 0.2% in January. However, orders for manufactured goods overall rose 2.1% in January and total U.S. business sales increased 1.2% that month, too.

Lustgarten thinks those statistics represent positive signs that the economy is headed in the right direction.

"Inventory liquidation was 70% to 80% responsible for the last six U.S. recessions, so rising inventories is just one point as to why we have reasonable economic optimism right now," he said.

By 2004, Lustgarten expects that 3% year-over-year annual economic growth will push industrial capacity utilization past 80% and thus give the economy a boost.

About the Author

Sean Kilcarr | Editor in Chief

Sean reports and comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

Sponsored Recommendations

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

How Electric Vehicles Help You Prolong the Life of Your Fleet

Before adopting electric vehicles for commercial/government fleets, prioritize cost inquiries. Maintenance is essential; understand the upkeep of EV fleets. Here’s what you need...

How to Choose the Right Route Planning Solution

This free buyer's guide will help equip you with the knowledge and insights needed to analyze route planning software and vendors in the market and, ultimately, make an informed...

How to Put Your Trucking Data to Work

How fleets can overcome data overload to optimize operations and get ahead.

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!