Sluggish Economic Recovery Seems Underway
Nov 9th, 2009 | By Dawn Rivers Baker | Category: EconomyAll things considered, reaction to the news that the economy grew 3.5% during the third quarter of this year was greeted with relatively little fanfare. Perhaps the most interesting thing about the sudden spike in gross domestic product is the fact that it primarily reflects a sizable increase in personal consumption, which is explained, in part, by the now-defunct “Cash for Clunkers” program. It is also interesting to note that consumer confidence has been slipping since May, when people began to notice that the American Recovery and Reinvestment Act had failed to produce the miracle so many expected. Even now that there have been scattered showers of economic good news for some months, consumers are unimpressed for as long as the job market remains in the tank.
As for the small business sector, the National Federation of Independent Business (NFIB) reports that optimism has been slowly and painfully climbing for much of this year, although last month’s gain in the index was slight. As of September’s survey, quarter profit trends and reported capital spending plans remain at historic lows. More business owners plan to cut jobs and reduce inventoris than will hire or invest. Almost twice as many expect sales volume to decline as expect it to improve in the coming months. All of which suggests that nothing has happened to adjust the economic catch-22 otherwise known as a jobless recovery. And that, in turn, means that nothing has happened to stem the probable tidal wave of new microbusinesses that are almost certainly forming at this every moment.
