Speaking on NBC’s Meet the Press, Treasury Secretary Timothy Geithner told viewers “encouraging economic signs are emerging.” However, Geithner also admitted the U.S. recovery is choppy U.S. recovery is choppy.
When asked whether the recession was over, Geithner said it was the economists who would determine that, but added, “The real test of recovery will be when we have unemployment coming down, people are back to work and businesses confident to invest again."
That could take several more months. Reuters reports, “the key number in next year's U.S. congressional election may be the unemployment rate the unemployment rate, which last month hit a 26-year high of 9.8%.” Consensus is calling for a -160,000 jobs in October.
According to the Jackson Sun, the White House is claiming the stimulus 650,000 jobs saved or created under President Obama's stimulus plan. Further, “the White House also says the stimulus is on its way to meeting a goal of 3.5 million jobs by the end of 2010.”
However, not all experts and analyst agree. Many claim proving that number is difficult. But nonetheless, the number of unemployed Americans will continue to be a key benchmark of whether the economy is moving forward into recovery.
If unemployment continues to rise… consumers will be less likely to spend money. Since consumer spending makes up two-thirds of GDP, less spending will be mean less growth.
Although the U.S. economy grew in the third quarter at 3.5%, most of that growth came from “Cash for Clunkers” and the first-time homebuyer tax credit. Philadelphia Business Today says that growth “marked the first increase in the nation's economic activity after falling for four straight quarters – the longest stretch of declines since quarterly recordkeeping began in 1947.”
Editor Michael Robinson of BreakAway Investor believes we will see a jobless recovery. Michael adds, “Ironically, as the overall economy starts to grow again, unemployment continues rising.”
Michael explains:
Living near Silicon Valley, I have seen firsthand how technology companies benefit from increase capital expenditures near the end of a recession.
In this kind of scenario corporate executives throughout the economy conserve cash by holding down labor costs to boost productivity. Often they will invest in new technology before committing to hiring more workers who bring with them other costs like unemployment insurance, workers’ compensation, retirement and medical care.
That’s why Michael has been recommending beaten-down technology companies to his readers. “As we do see recovery, they’ll be some of the first companies to post strong share prices,” Michael tells readers.
Learn more about BreakAway Investor's latest opportunity here...
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