More and More Indicators Turn Positive
The economy has turned the corner, and the early stage of the economic recovery will be stronger than many are currently anticipating.
I strongly believe that the worst of this miserable economic recession is behind us. Good riddance!
When all is said and done the economy will have lost almost 5% of its jobs, more than any post war recession. The recession so far has extended to 18 months, also a post war record. Fortunately, I now believe that the economy has turned the corner, and the early stage of the economic recovery will be stronger than many are currently anticipating. Early economic indicators have supported this view for some time, while some earnings reports and conference calls for the second quarter are finally beginning to support this view as well. Over the intermediate term, inventory restocking and a return to more normal production levels in both autos and housing will drive economic improvement.
Some of the early economic indicators that we track (ISM purchasing managers' survey and real wages) turned positive in November and December of 2008, and a much broader base of indicators turned positive (or at least less negative) very late this spring.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.