Here are some recent headlines from various business publications over the past weeks: "Consumer Confidence Falls for Fourth Straight Month;" "Leading Indicators Fall Again, Signaling Shift to Low Gear;" "Industrial Production Falls for First Time in Nine Months;" "Recovery in Corporate Profits Appears to be Losing Steam;" "Economic Growth Slows Far More Than Expected."
With so much negativity being bandied about, the question for those contemplating purchasing or selling a home is what effects (if any) our stumbling economy and the possibility of war will have on interest rates.
Like most people, I try to sift through the tea leaves of the Federal Reserve Board and cull the implied direction its policy statements indicate. One thing is for certain when analyzing their utterances -- they'll be filled with nuances and potentially conflicting remarks that always allow for the opposite of what's being proposed to occur.
That was clearly demonstrated last week when the board left interest rates alone at a 41-year low of 1.75 percent for federal funds (the rate banks charge each other for overnight loans). What's interesting to note is for the first time since 1995 two members dissented and voted to lower rates now.
With the economy continuing on its road to recovery, the slower-than-projected pace combined with concerns over oil prices, jittery markets, corporate governance scandals and a possible war with Iraq demonstrated the complexity of the issues involved and the dichotomy that can arise when the economic numbers are good but not as good as anticipated.
Consumer spending remains strong, but the stock market remains weak; businesses are faced with a variety of economic uncertainties; there's lack of commitment to increased capital spending and hiring are two factors restraining the recovery; leading economic indicators dropped 0.2 percent last month; layoffs have been on the rise and may increase in the months to come; and manufacturing lost some of its momentum from earlier this year.
Still, consumer spending -- which accounts for two-thirds of all economic activity -- remained brisk, even though consumer confidence fell to 93.3 in September from 94.5 in August, its lowest level since November.
With the economy growing at a tepid 1.1 percent in the second quarter, some analysts are raising their profit forecast for this quarter but lowering them for the fourth quarter and first quarter of next year. The trend in some economists' eyes will reverse later in the coming year.
Finally, one report after another repeated the need for the following to happen in order for our economy to return to full health -- an increase in business investment, which would be perceived as an indication that profits will soon be increasing.
What all this portends for the future interest rates can be predicted with about the same accuracy as the score of a Bengal football game (that is to say, by how much they will lose). But it's reasonable to conclude that for now rates will remain incredibly good, and the possibility exist for them to move even lower.
THIS WEEK'S TIP: Preparing Your Home for Sale, Part 2
Typically, storage facilities offer large garage-type storage spaces that are weather-proof, temperature-controlled and offer high security with easy access for renters. The cost of renting this space is reasonable, with flexible lease terms to fit almost every need.
Sellers should also keep in mind that for many potential buyers curbside appeal is often the determining factor as to whether or not they venture into a home that's for sale. Keep that in mind, and consider storing such items as grills, bikes and other children's toys.
If you don't wish to store some of your items, one popular way of cleaning out the clutter is to hold a yard sale. Another option is to donate the items to a local charity.
STEVEN J. LOWENSTEIN, a native of Cincinnati, is a Realtor with Coletta & Associates Realtors. He's a graduate of the University of Cincinnati and holds a Master's degree from North Texas State University.
