Weak Signs of a Weak Recovery
Jan 11th, 2010 | By Dawn Rivers Baker | Category: EconomyIt’s the start of a new year and everybody in the small business community seemed infused with a new sense of optimism. But that faith in economic good things to come took something of a hit when we learned that the economy lost another 68,000 jobs in December. Of course, some where less surprised by the news than others. According to the most recent Consumer Confidence Index, released in late December by The Conference Board, folks are feeling much better about how the economy will perform in a few months but they still think the current economic situation is pretty poor. The next injection of optimism (or crushing disappointment) will come in the form of the Commerce Department’s initial estimates of gross domestic product (GDP) for the fourth quarter of 2009.
Third quarter GDP grew unexpected, although the initial estimate of 3.5% growth was revised downward to 2.2%. No doubt everybody in the Obama Administration is hoping for continued growth, a signal that the Great Recession is slipping into a Great Recovery. but the signs are not propitious. Without Cash for Clunkers to stimulate consumer spending, the largest driver of that third quarter growth will be missing. Another indicator is small business optimism, which still has not turned around and has been pretty depressed for the past six quarters. It all looks pretty dire, which is why the President and Congressional Democrats are so nervous. With the nation heading into a midterm election year while the economy still in a shambles, no doubt there are some fairly urgent political and policy reasons to want to kick start the economy as soon as possible.
