WSJ - 'Goldilocks' Economy: Can It Last

Today's "Main Event" column in the WSJ provides a clear take on this week's economic news, revisting the Goldilocks characterization -- not too hot, not too cold -- of the curent state of the national economy. On housing:

Why hasn't the housing slump slowed growth? Investors worried last year that falling home prices and slowing sales could spark a recession by cutting into consumers' spending power. The housing slump shaved 1.16% off annual GDP growth in the fourth quarter and 1.2% in the third. But lower oil prices, which fell as low as $51 last month from a high of $77 a barrel last summer, helped offset those losses. High stock prices, fueled by the 14th consecutive quarter of double-digit earnings growth, also helped to offset the slump.

The latest indicators suggest the housing recession may have bottomed out. Sales of existing homes increased at a seasonally adjusted annual rate of 4.9% in December, the largest such gain since March 2004, although that may have been influenced by unusually warm weather. Mortgage applications and building permits have also increased.

In spite of the concerns on many American minds, wages not keeping up with productivity gains along with rising benefit costs, the consumer confidence index reached a five-year high (110.3) in January.

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Also in today's WSJ, many cities have employed more innovative, market-driven approaches to parking, which has led to more expensive parking in some areas, greater use of mass transit and more "churn" to help ease parking shortage. The premise that higher prices, not more parking, is the solution to the parking crunch may or may not be true. It seems that in "newer", less dense cities like Denver, free parking is in abundance throughout the metro area, putting the central business district at a competitive disadvantage. The article discusses Donald Shoup's 2005 book, The High Cost Of Free Parking, as a key catalyst in new thinking of coming up with parking solutions. One of his precepts includes ensuring that 85% of available parking spaces are occupied at all times by adjusting rates in real time. Perhaps a technological solution for drivers, such as a "toll tag" for parking, would alleviate some of the headaches involved when rifling under car seats for loose change.

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On Wall Street, Irvine, CA-based Standard Pacific Homes stated that its profits were off 72% in 2006. CEO Stephen Scarborough: "We believe many prospective homebuyers are waiting on the sidelines for signs of stabilized pricing."