Do Economic Indicators Really Mean The Recession is Over?

On the final day of April 2010, the US Commerce Department released statistics and economic performance news about the 1st quarter results for 2010. The good news? The economy did grow at a 3.2% pace, which means that American consumers did spend more than they did three years ago in 2007. The bad news is that the actual results were shy of the 3.4% growth predicted, and the jobless rate still stands at a high 9.7%.

What the Numbers Mean

However, a .2% difference is nothing to shun. Analysts did have the right idea when they forecasted economic growth, knowing that consumers would once again increase their spending. However, the unemployment rate is a number that needs attention. It is obvious that some consumes believe that “happy days are here again,” but the fact remains that business growth is still stagnant.

As April 2010 came to a close, many corporate Fortune 500 companies released their earnings reports and stockholders rejoiced. By the end of April, the Dow Jones S&P 500 index rose 1.3% to top the 1,200 mark once again. Positive earnings results by the giant corporations may not seem like the best news for small business owners, but it does mean that larger companies are earning more and spending more for services and products from small to medium sized businesses.

Looking to the Rest of 2010

While the 3.2% economic growth means that the U.S. has certainly turned a corner from its longest recession since the 1930s, the rest of 2010 will determine just how far we will need to go in order to completely recover. Analysts calculate that to drop the unemployment rate by just 1% by the end of the year, we would need to experience an average of 5% growth each quarter. However, the overall economic growth for all of 2010 is expected to be around 3.1%.

The bottom line is that consumers are becoming more confident and spending more. The recession may be past negative growth and positive unemployment, but it is far from over. However, as long as small businesses continue to sprout and flourish with sound business practices, this time next year will have much better news.