Turning the corner on the economy

We have now seen the first real signs that economic recovery may be coming. There is a light at the end of the tunnel, so to speak. Recent economic data shows that the economy shed only 345,000 jobs in May. For me, the retreat from the 600,000+ range is a sign that things are starting to stabilize. Employers have substantially made employment cuts, and are starting to take a breather, to look around at where we stand.

Additionally, I have been writing here that I simply don't understand how the stock market could have rallied so much in the past couple of months, without any real positive economic data to support such a move. In the end, the most obvious answer was that government intervention with Billions, and perhaps over a Trillion dollars, had no where to go with the money, other than the stock markets, and that this has been a primary driver of the recent run up. I'm not complaining. I feel better about my investments than I have since St. Patrick's Day.

But I have some real concerns about the economy, and what economic bad news is still to come. I worry that the light at the end of this tunnel is really the train coming to flatten us. We have economic issues to still face, and work through. But the good news is that every day we work through these, and the economy, the national security, and the markets don't falter, is one more day closer to a more stable, prosperous new day.

We still need to absorb GM and Chrysler workers that are losing their jobs. Along with the corresponding dealership jobs, and supplier and ancillary jobs associated with the auto industry. We still have a housing issue of foreclosures, of rising mortgage rates, Commercial and Prime Mortgages that are starting to default. We have state crises, pension guaranty issues. The list is still long.

BUT...

We are starting to face each of these issues head on, starting with GM, and housing. States are having to make tough cuts, but most are making them, and people are starting to develop better habits of saving and spending less. While that doesn't help our economy in the near term, it does help our overall fiscal health in the long run, as people end up less reliant on a government assistance program for survival.

Stemming the tide on employment is the first step here. Stabilizing markets is the second. If we can start to figure out how to work through the home mortgage issues, I think we are on our way. Things like fighting inflation, and dollar devaluation...heck even budget deficits are more manageable when people have jobs, and businesses can hire workers. And we can start to focus on how to step on the gas, as a society, rather than fixing the leaky boat.

But this was a good week of economic data, as far as I am concerned. It could represent a changing of the tide. For the pessimist/pragmatist like me, these signs are a "green shoot" of hope for a better economic tomorrow, coming soon.