Are We Headed Toward Economic Recovery? Even before the tax cut package was passed this week, there were some encouraging signs that the economy is strengthening. But, the jury's still out on whether we've reached a tipping point to a self-sustaining recovery.
NPR logo

Are We Headed Toward Economic Recovery?

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Are We Headed Toward Economic Recovery?

Are We Headed Toward Economic Recovery?

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


Some encouraging signs this week that the economy may be getting better. Government data suggests that people are buying again; other data show layoffs are declining. And on Wall Street there's word that the stock market is poised for a long upward charge. NPR's John Ydstie reports on whether we've reached a tipping point to a self-sustaining recovery.

JOHN YDSTIE: John Silvia watches the economy like a hawk from his perch as chief economist at Wells Fargo. He says reports on industrial production and retail sales for November that came out this week are encouraging.

Mr. JOHN SILVIA (Chief Economist, Wells Fargo): Both of them suggest the economy actually is doing quite well. So in the fourth quarter of this year we're probably going to have growth around three-and-a-half percent.

YDSTIE: So you think right now that we are in a sustainable recovery?

Mr. SILVIA: Oh, absolutely. Now, clearly for many people it's not the traditional economic recovery or economic boom.

YDSTIE: That becomes apparent talking to shoppers at the Oak Park Mall in Overland Park, Kansas.

Ms. JEANINE BACHMAN: You know, I think it's still tough. I mean, you hear where things are getting better, but then you turn around and hear somebody's lost their job, so you know...

Mr. RIZZ BACANA(ph): It used to be before, everybody got something, but we kind of have to be a little bit choosy this time.

Ms. KATE REDENBAUGH: We're definitely more conscious of things. You know, we're shopping sales and making sure we get the best pricing and, you know, if you have to make one more stop, instead of doing it all in one place we might make multiple stops if it saves us some money and stuff, so I think it's still shaky.

Mr. BRANT PIERSON: Last year we cut back, but this year we're sitting a little better. So we're going to open up a little bit this year to make up for last year.

YDSTIE: Christmas shoppers Jeanine Bachman, Rizz Bacana, Kate Redenbaugh and Brant Pierson.

Pierson is an example of Americans who are doing better and spending more. Many of them are well-off Americans who patronize luxury shops.

Ms. PATTY EDWARDS (Trutina Financial): The high-end retailers are knocking it out of the park and they are having one heck of a good time right now.

YDSTIE: That's Patty Edwards, chief investment officer and a retail specialist at Trutina Financial in Bellevue, Washington.

Edwards says high-end stores are doing better because well-off shoppers are seeing the value of their investments and 401(k)s rise as the stock market moves up. Things are different for the middle class and lower income Americans, she says.

Ms. EDWARDS: The consumer can't come back fully with nine or 10 percent unemployment. The consumer can't come back fully if they can't get a loan, and right now they can't get a loan.

YDSTIE: Those issues, along with the foreclosure crisis, were on the mind of Federal Reserve policymakers this week. After their regular meeting on Tuesday, they called the recovery disappointingly slow. And they surprised some of the economic optimists by saying they'll continue injecting extraordinary amounts of money into the economy.

That's fine with Dyke Messinger. His firm, PowerCurbers, Incorporated in Salisbury, North Carolina builds the machines that make curbs and gutters for streets and highways.

Mr. DYKE MESSINGER (PowerCurbers, Incorporated): We're still down about 50 percent from where we were - that being mostly, the drop being mostly U.S. residential and commercial construction.

YDSTIE: With construction in the dumps, the U.S. demand for Messinger's machines has largely come from federal stimulus spending for infrastructure. He's worried about what will happen to orders when that fades in the next few months.

There is one bright spot though: foreign sales.

Mr. MESSINGER: Our hopes for international business this coming year are really quite high. We think we can put another 20 percent on top because of what's going on in the rest of the world.

YDSTIE: Foreign sales have been good for a lot of big U.S. multinationals too, from McDonald's to Hewlett Packard. That's behind the recent big jump in the stock market, which has seemed somewhat out of sync with progress in the U.S. economy.

Whether the U.S. recovery is self-sustaining remains a question. But the new tax package, with a couple hundred billion dollars in added stimulus, should help it gain traction.

John Ydstie, NPR News, Washington.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.