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The market has been showing some sign of strength this past week, with the DOW finally closing above 9000. Surely this is a green shoot.
Housing, a number near and dear to many around coastal NC, showed signs of stability. Empirical data suggests that there is some activity. I see homes under construction in neighborhoods where I live. The housing numbers nationally are showing stability although stability at a level 40% below the peak of 2005 in terms of unit sales. New housing sales have been another green shoot, up a lot on a month to month basis. Only a green shoot because they are still trailing last year by more than 25%.
At least one pundit has declared that the recession is over. Technically, maybe it is. Surviving the recovery will be challenging at best and overwhelming at worst.
Unemployment will stay high and go even higher during the second half of 2009 It will remain high through 2010. This recovery will be slow and arduous, especially for small businesses. Again, there is empirical evidence that the small business community, the engine of growth in the USA, is struggling. In my neighborhood and across Wilmington, NC I see more and more empty store fronts.
Credit remains an issue and may never return to where it was. The days of the no documentation loan is probably gone forever and low credit scores aren’t likely to qualify either. Fixing your bad credit rating will be more important than ever but difficult to do if you don’t have a job.
As we are seeing, people still need to buy housing. They may be a lot more hesitant to speculate on housing. After the Depression of the 1930’s, people were reluctant to invest in the stock market. Banks had failed (without FDIC insurance) so there must have been a lot of lumpy mattresses.
How well you fair in today’s economy will be determined by where you are in the food chain. As Peter Drucker, the famous management guru said more than 40 years ago, “The workers of the future will be knowledge workers”. He was right then and remains right today. The future of our way of life depends upon how knowledgeable we are. Education and innovation will be the future. If we provide quality education and encourage innovation (95% of radical new product ideas come from small businesses)we will be able to continue life as we would like it to be. Absent these, we will become a poor nation working for others. We will trade places with China and India.
If you have a profession or are a knowledge worker, you will be among the first to enjoy the coming recovery. If you are not a professional or knowledge worker and you don’t have a job (or even if you do) now is the time to get the education you need to qualify. Get those knowledge skills up to speed. Check out Community Colleges as a low cost source for your educational needs.
