The Economy - Light at the End of the Tunnel

Did we finally hit bottom? Is the ship starting to turn? These are questions that everyone wants to know about the US Economy. Consumer confidence has risen to a nine month high as reported by the newly released Gallup polls this month. What does this mean for you? More spending by the general public and private/public companies. As a direct result we will see the economy slowly start to strengthen, triggering less employment cuts by some companies and new hiring by others.

Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market, and incomes will improve in the coming months. While confidence is still weak by historic standards, as far as consumers are concerned, the worst is now behind us.

With confidence in the economy strengthening you can prepare for future opportunities by developing your own insight and knowledge to your specific industry that you are involved with, updating your resume, and applying for jobs now if a move is warranted.

A slew of better economic news continues to be reported. Some of the encouraging data is detailed below. The question becomes how much of this news is factored into the market at this time.

• Corporate profits are up over 11% in the first two quarters of 2009
• Business Inventories are down significantly on a year to year basis. This decrease in inventory will cause a need to replenish inventory stock.
• Durable goods orders were up nearly 5% in July
• New home sales up nearly 10% on a month to month basis in July
• Using the Federal Reserve model, GDP growth in the second half of the year could come in at an annualized rate of 4%.

Undoubtedly, the Armageddon scenario facing investors and the economy in March seems to be off the table. I believe a crucial question at this point in time is how much have the artificial influences skewed the data, i.e., cash for clunkers, one time home buyer credit, stimulus checks, etc. Will these stimulative efforts result in a sustainable economic recovery into 2010? Time will only tell…