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50 • DECEMBER 2011 • WORLD FENCE NEWS Crystal Ball Outlook continued from page 47 Management's Manufacturing Pur- chasing Manager Index was 51.6 in September, up from 50.6 in August. A value above 50 indicates that more re- sponders reported improvements than reported deteriorations, so we are still on the positive side. But the average historical value for manufacturing PMI is 52.7, so we're continuing with the jagged and slow theme. September was better than a poor August, and once again, hope- fully we can build on that. Non-manufacturing PMI for Sep- tember, meanwhile, was 53, 0.3 per- centage point lower than the 53.3 percentage point registered in August, but still showing growth for the 22nd consecutive month. Light vehicle sales increased 9.8% over September 2010, still respectable. Sales of domestically manufactured light trucks were up 16.9% over Sep- tember 2010 and slightly over Sep- tember 2010. Clearly, while we see signs of con- tinued slow growth in most areas, many of us of course would like to see the unemployment rate drop below 9.1%, which is where it stands at this writing. Perhaps a sign that we are "level- ing off" is that we are not seeing the job losses that would define a new re- cession. Because the unemployment rate will remain stubbornly high for most of 2012, it will be difficult to dis- tinguish, as has been the case through- out this recovery between a stalling economy and one that is just gathering momentum. I want to mention here a few more reasons why I believe we are not headed for another recession. Despite weeks and weeks of so- called pundits parading in the media that the U.S. economy is headed for another recession, I don't see it in the data that I have shared with you in this column, as well as other indicators that I won't take your time to share at this point. I continue to see slow growth, but no recession. I'll be the first to admit that the U.S. economy isn't a "poster child" for growth. The economy only grew at an annual rate of 1.3% in the second quar- ter. Let's face it: slow growth is better than no growth! Now, let's try to identify some other indicators to help support my po- sition, starting with automakers ramp- ing up in September. At the beginning of the month, new car manufacturers provided early indications of improvements in con- sumer spending, i.e., to mention two major manufacturers, GM reported a 19.8% surge in U.S. sales (207,145 cars); Chrysler Corp, which is now controlled by Italy's FIAT, reported a 27% jump in September U.S. sales to 127,334 cars. Just as an aside, Volks- wagen showed a 36% increase in U.S. sales to 27,036 cars. It would appear that the automakers have something to build on. Another reason to believe we are not falling back into a recession is re- tail sales. It turns out that, in addition to automobiles doing well in Septem- ber, the U.S. Census Bureau's monthly report showed a 7.9% increase year over year. That marks the largest year over year increase since 1999, and the third highest reading over 1993, according to BESPOKE Investment Group. Again, not exactly a sign of a re- cession. Reason No. 3, coupled with the previous data stated, the Federal Re- serve reports that industrial production and capacity utilization levels as of September reflect a three year high, their highest levels since Lehman Brothers collapsed in September 2008. Finally, for this column, another reason why I think the recession is be- hind us is the recent manufacturing re- port. The most recent manufacturing report released by the Federal Reserve Bank of Philadelphia "toasted" expec- tations. The manufacturing index rose to 8.7 in October from minus 17.5 in September; most economists were only looking for an improvement to minus 10. So much for gloom and doom: that's a definite ray of sunshine. I'm the first to admit that we don't have definite proof yet that the U.S. economy is picking up a full head of steam. But, the current trends are cer- tainly positive. We are still in need of clarity re- garding debt reduction, which will in- volve spending cuts, changes in the tax code – both corporate and individual – and the housing market, which has ex- hibited some life, but still has a pretty large inventory of existing homes to work down (foreclosures, etc.). Overall, while I don't believe, as I have said throughout this column, that we will fall back into a major reces- sion, I do believe that growth will be slow, on the order of 2% for the rest of contin ued on pa g e 54