The Biz of Pacelinebiz

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Outlook for 2010 – let’s take a poll

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This week I am going to change things up a bit and add a poll to my blog and let you voice your opinion on the economy.  First, I will offer a few words on my outlook for 2010.   

The consensus appears to be that 2010 will be a recovery year with fits and starts in the first quarter perhaps showing some job growth.  The entire year forecast is for GDP growth of 2.0% – 2.5%.  Most will cite that fact and state we are going to have a jobless recovery which will keep the unemployment rate by year’s end at 9.5%.  Even the Federal Reserve is forecasting an unemployment rate in that range.  The truth is, I don’t know and am certainly less qualified than the team of economists employed by the Federal Reserve.  I will tell you this; there are 3 things that I consider important factors in the strength of the recovery.

1) The rapid and massive job cuts that began during the Fall of 2008.  Perhaps the magnitude and swiftness of cuts will indicate a similar reversal.

2) The decades of consumer spending is a hard habit to break.  This meltdown will not teach a lesson to the majority of spenders that fuel the economy.  This was not the great depression.  I believe if they have access to credit they will spend.  Access to credit leads me to item 3.

3) Will banks begin to lend to all the spenders out there?  A lot of this depends on the Federal Reserve. Banks can now borrow at near zero and make decent margin on government securities with no risk.  Why extend credit?

Enjoy the poll, and have a great week.


Written by pacelinebiz

November 30, 2009 at 7:38 pm

Posted in Business

Tagged with ,

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