The Economy…What’s Going Right?

Gloom and doom…it’s everywhere!  Think Greece, budget deficits, high unemployment, housing doldrums, and the threat of a European recession. 

Guess what!  More than a couple things are moving in the right direction!  Here are just a few. 

Real GDP has expanded for nine consecutive quarters and at an annual rate of 2.5%.  Although not stellar growth, it is recovery…as opposed to recession.  

Business investment has been the strongest component of our economy.  Believe it or not, equipment and software investment has grown at an annual rate of nearly 13% over the last nine quarters…roughly five times faster than GDP!  Transportation and related equipment along with computers and peripheral equipment have also done well. 

Despite confidence issues, consumer spending grew by 2.2% over the last nine quarters.  Check out the surprising sources of this growth:  furniture, household durable equipment (i.e. washers), and (at times) autos. 

Employers have reduced plans for layoffs.  Great news!!  According to Challenger, Gray, and Christmas, employers have reduced this number by 63% to 42,759 from the prior month.  Perhaps this augurs well over time for more favorable unemployment numbers. 

Last but not least, 75% of employers who had reduced or eliminated their 401(k) match have now restored them.  This is good news for employees and suggests that companies are becoming stronger and more confident about the future. 

Yes, the road to economic recovery remains long and winding, but there are concrete reasons for optimism.  Think positive!


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