If you’ve paid any attention to the financial news in the last few weeks, you’re probably wondering what happened to the recovery we were told was under way.
The stock market has been on a roller coaster ride of ups and downs, mostly downs. The price of oil is falling on fears that a global recession could slash energy demands. Gold prices have set one record after another. The 10-year Treasury note hit its lowest yield. And mortgage rates fell to their lowest levels in at least four decades.
So where is the recovery?
Unemployment in Georgia … rose last month. Nationwide, the number of people filing unemployment claims for the first time rose to 408,000.
Bank of America, the nation’s largest bank, announced Friday it will lay off some 3,500 employees as it tries to get its financial house in order, a move that will only worsen the nation’s job outlook.
Inflation is at its highest level since March. The price of gas, food, clothing and other necessities has risen, and is squeezing household budgets at a time when most workers aren’t getting raises.
Sales of existing homes nationwide fell for the third time in four months, a troubling sign for a housing market that can’t seem to turn around. Manufacturing, a strong point in the economy until recently, has slowed.
It’s not just the American economy. Concern about debt in several European countries is hurting world markets, which in turn affects Wall Street.
So where is the recovery?
Despite the mostly grim economic news, there are some faint signs of improvement. At the same time he announced that Georgia had lost 30,200 jobs in July, Labor Commissioner Mark Butler said the state was beginning to see some increases in hiring at manufacturing plants in the state. He also said there has been an increase in the number of inquiries from manufacturers looking to expand or relocate here …
Is it enough? Honestly, no. People are still losing their jobs, and companies aren’t creating enough new ones to meet the demand. Economic recovery can’t be real until it includes jobs, and right now, that’s not the case.
President Barack Obama will unveil a new job growth package next month, and he intends to spend much of this fall pushing a sharply divided Congress to pass the plan. Details are scarce so far, but it will likely include tax cuts, spending on infrastructure and measures designed both to assist the long-term unemployed and bolster certain struggling sectors of the economy.
Whether the plan will be enough to spur job growth remains to be seen. The best thing government can do to create jobs is get out of the way and let the private sector do its work. So far, Washington has been reluctant to do so.
Banks are also key to recovery. They need to get comfortable again loaning money to businesses and individuals. But as the Bank of America news last week indicates, banks themselves are still digging out of their own financial holes.
In the long run, the biggest concern through the unrelenting march of shaky news are our own attitudes. Wise investors in the market know that those who panic will suffer most while those who keep their heads will weather the storm. That’s advice we all should follow in dealing with our own financial decisions.
Even when the news is bad, we should see the glass as half full. Those of us who have jobs and are paying the bills should feel fortunate that the worst of the recession hasn’t hit us too hard. Those still looking for work should find creative ways to make themselves a good hire through training, education and perseverance.
We must make wise choices in how we spend and save. Business owners should look to the long term while still doing everything possible to take care of their current workers’ needs. We also have to stay involved politically and hold our leaders accountable for their economic decisions.
We must embrace the potential that future economic change may bring. The business world of the next 50 years may be dramatically different from the past 50 because of lessons learned in our current financial doldrums. After Jimmy Carter’s “malaise” of the late 1970s, the country embarked on an incredible period of growth and success that lasted for many years.
We can rebound; we have done so before. To do so we need leadership, commitment and faith in ourselves, our neighbors and our economic system.