Economic Stimulus: Slow spending on infrastructure colors perception of success.
U.S. Economy: Companies move from centralized to regional centers.
Energy: Prices to moderate if supplies aren’t disrupted.

Economic Stimulus
Was the economic stimulus a success? Depends on how you measure.
The answer’s no, if set against Obama’s original goals: Holding joblessness around 8% and limiting the economic contraction this year to about 1.2%.

But measured against what would have been, it was a rousing success. Washington added about $90 billion to GDP in the second and third quarters, through direct payments to the states, COBRA subsidies for the unemployed, reduced income tax withholding plus the first round of infrastructure spending. Otherwise, the second quarter contraction would have been worse than the 0.7% it was, and third quarter GDP would have been expected to come in flat. As it is …
GDP surely rose in the third quarter, probably by a healthy 3.5% or so.

One reason for the view that the stimulus isn’t panning out:
Obama’s tendency to focus on infrastructure development. Spending on it has been slow to take off…with long lead times for planning and contracting … and slow to pay off in terms of increased business spending and job creation.

Funding will grow for the next two years and then stretch out for nearly a decade. Of course, such spending could also yield long-term benefits, improving productivity and lifting growth long after the recession has faded.

U.S. Economy
Note a growing trend away from centralized distribution centers for goods and parts. After almost a decade of consolidating operations into just one or two giant facilities to service half or more of the country, a slew of companies, including General Mills, Target and QVC, are switching to regional centers.

It spells good news for some cities, notably port cities on the East and Gulf Coasts…Baltimore, Norfolk, Va., Charleston, S.C., Mobile, Ala., etc.

And for truckers, who will benefit from increased short-haul business.

Why the switch? Businesses fear more bottlenecks at the dominant ports … Long Beach/L.A. and New York…once the economy and global trade start to pick up.

And there’s anticipation of an enlarged Panama Canal. In four years or so, megaships ferrying goods from Asia will be able to serve East and Gulf Coast ports.

Energy
Count on crude oil and other fuel prices to ease a bit come winter. Bulging oil inventories and the usual seasonal decline in driving will make up for slightly higher industrial demand as world economies recover.

We see oil trading between $55 and $65 a barrel from Dec. to Feb., down from around $75 today. That assumes no big disruption in shipments from Nigeria, Mexico, Venezuela or Iran … and no coordinated intervention by central banks to buoy the dollar. Intervention doesn’t seem at all likely.

Gasoline prices will ebb accordingly, shedding 20¢ a gallon by Jan.

Natural gas will remain a bargain, changing little from today’s $4.50 per million Btu. No need to worry about another spike similar to last year’s.