Just because stocks have risen does that mean the economy has recovered?
No, but it appears to be bottoming out and hopefully, soon it will be on the rebound. There are several other indicators to consider when assessing the state of the economy.  The Conference Board’s index of leading indicators contains ten, and in August the index rose 0.6 percent.
Five of the ten indicators posted increases in August: supplier deliveries, stock prices, interest rate spreads, consumer expectations and building permits.
Three of the indicators offered negative results: jobless claims, capital goods orders and real money supply.
The remaining two indicators, consumer goods orders and the …read more

Wall Street is reacting negatively today to weak retail sales data. Retail sales fell 1.1% in March. As a barometer of consumer spending, this unexpected slump may indicate that the economy is not yet rebounding.
According to the AP, the drop was far worse than the increase of 0.3 percent that analysts polled by Thomson Reuters had been expecting and marked the biggest fall in three months.
“The choppy data that we’re seeing, whether it’s economic or earnings, reminds us that we’re still not out of the woods,” said Sean Simko, head of fixed income management at SEI Investments in Philadelphia. “The …read more

The downward spiral in a recession (downsizing & cutbacks > unemployment > loss-of-purchasing power > cuts-in-production > more unemployment > more loss-of-purchasing-power > and on and on) can be mitigated if the Fortune 500 & Blue Chip corporations (which remain profitable, recession or not) played Big Brother to Small Business Kid Brother by doubling their accounts receivable days (encouraging buyers to purchase) and decreasing by half their accounts payable days (thereby giving much needed relief to their suppliers). In effect, this will increase the velocity of funds in …read more

One of the greatest problems of a prolonged recession is the downward spiral that corporations (large & small) cause by their survival strategies. As companies downsize & cutback, unemployment causes loss of purchasing power in the market place which make companies bring down production levels which causes more unemployment which causes more loss of purchasing power . . . etc etc.
One survival strategy which contributes to downsizing and cutbacks is the knee-jerk reaction of finance managers. In a recession, they almost automatically shorten accounts receivable and lengthen accounts payable. This has the double whammy effect of slowing …read more

Economic indicators point to a slowdown for the fifth consecutive month: manufacturing & services slowing, companies cutting jobs accompanied by first time claims for jobless benefits increasing, continuous deterioration of the housing market, stock prices down, etc.
Jean Murray of Small Business Boomers citing Jennifer Heigl’s Daily Blender presents evidence of consumer spending pushing the US economy into recession.
Technically, an economy is in recession if indicators drop for 2 consecutive quarters.

Whether the US is in actual recession or not, consumers feel it is. Consumers, even those with comfortable discretionary disposable incomes, are behaving as if recession has already occured.
Should you …read more

Obviously, a long way off.
Economic indicators point to a slowdown for the fifth consecutive month: manufacturing & services slowing, companies cutting jobs accompanied by first time claims for jobless benefits increasing, continuous deterioration of the housing market, stock prices down, etc.
Technically, an economy is in recession if indicators drop for 2 consecutive quarters.
Whether the US is in actual recession or not, consumers feel it is. Consumers, even those with comfortable discretionary disposable incomes, are behaving as if recession has already occured.

The more relevant question is: Is the present economic situation leading to an economic depression, and …read more