Is the economy really getting better?
It sure doesn’t feel that way. Unemployment remains high nationally, and in some areas it’s really high. Sure New Hampshire is doing better, but everyone seems to know someone that’s been affected by the recession. And lots of people are upside down on their mortgages. When will the bad news end?
Surprisingly, help is on its way. A spate of economic indicators are pointing towards better things ahead. For five months now people have been buying more cars. Wages are going up—not dramatically, but they are higher. Factory orders are higher. Banks are reporting that demand for both consumer loans and commercial loans is rising. Consumer confidence is rising, so personal consumption is going up as well.
The only thing that isn’t growing so fast as is the jobs market. Because of the storms last month the picture is muddled, but right now the employment picture still looks bleak. During the downturn we lost some 9 million jobs. So far, only one million have come back. We should be thankful that they’re growing, but at this pace of expansion it will take until 2020 before we get back to where we were in 2008.
The good news is that we shouldn’t have to wait that long. There are indications that improvements in the labor market are just around the corner. The latest jobs report was distorted by the storm and the Labor Department’s annual benchmark revisions, but putting the pieces together it looks like growth is about to shift into a higher gear.
This is what recovery feels like. You’re not there and not there, then suddenly you are. That’s what’s likely to happen this time.
Douglas R. Tengdin, CFA
Chief Investment Officer
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