Financial crisis, recession, unemployment is deepening or on the rise. What a mess! My today enthusiasm gauge for blogging is close to zero, but I do not give up. I have some ideas to share with you.
From 2001 - 2003 recession I learned that economic recovery is starting about one to two years before the unemployment numbers get smaller.
Since 1854, the US economy has gone through 32 business cycles (recessions and recoveries). In other words, the direction of economic activity eventually changed. Many times in these past cycles, the economy started to recover well before employment turned up.
The companies can use layoffs to increase efficiency, laying the groundwork for future increases in profits and wages for their remaining workers. What that means is that a 1% loss in jobs results in a smaller than 1% loss of production. And using assets more productively frees up resources to do "new" things. We have lost millions of farming jobs over the decades and centuries, but
The nation as a whole is more prosperous as a result, not less.
Right now some economists scrutinize home sale and manufacturing orders for more positive signs. They know that the media and everybody else will be aware of economic recovery when this process has already got momentum.
So what is the good news right now?
The spring is coming in few days or weeks.
The days get longer and we will spend more time outside or in day light. Getting out of winter depression, building more endorphins and a new optimism will add to more energy for job search or more enthusiasm for current work. What about starting a new business?
Every spring smart employers start considering if it is the time for a new economic cycle. Overtime for workers first and new hiring later will translate in new/repackaged products. What products?
What goods sell well in down market?
- Entertainment, games, movies, and the like will continue to sell.
- More food for less money - five foot long, two burritos for pennies, etc.
- Cell phones and internet communication will sell well;
Everything is getting negotiable: houses, mortgages, cars, luxury items, trips and cruises. Not necessarily all are bargains or a must have items but it is worth a tray if you have the time, disposable cash or credit.
I think the automotive industry will shade more jobs and the leaner companies with financial support from government will compete better in current environment. Many drivers will give up or the winter will kill the old unsafe cars. The need for decent transportation will propel the demand at General Motors and Ford car dealers. This is happening every spring regardless of economic cycle.
Obviously I am the guy that is looking to a bottle and sees it half full not half empty. Therefore, I remain optimistic that we still live in the greatest country in the world and that one day soon we will look back on these times as just another bump in the road on our life' journey.
Until full spring and more signs for economic recovery I wish you the best of luck and good health.
Ernest Ionescu
http://investing-manage-properties.com
http://winner4us.com
