The economic news is like New England weather, stick around and it is bound to change.
This week is the five-year anniversary of the collapse on Wall Street when Lehman Brothers went down and AIG was on the brink…
So where are we now five years later? Here is one woman’s opinion!
Overall, it appears that the US economy is improving, although slowly, and there are potential disruptions on the horizon including the obvious issues in the Middle East.
Interest rates are higher which could have negative impact but for now things are holding steady, and employment is improving but not fast enough for some analysts. Of big concern is the ‘participate rate,’ the number of people looking for employment, which is falling.
This can be explained in many ways, one being that our aging population may be exiting the work force permanently which means they are making room for new employees. Perhaps older workers stayed employed longer than they planned to due to personal economic issues which have resolved. Many underwater homeowners can now breach the surface and are at even on their home loans.
Here in Massachusetts on the surface things seem to be moving along well. Construction has resumed all over the city of Boston and surroundings, cranes are humming and new projects are approved and on the way. Restaurants are buzzing, stores are humming, perhaps not at levels seen in the past but business people and consumers have adjusted their desires and expectations.
The housing market, which is such a huge economic engine, is improving every day especially in urban communities. There appears to be a trend towards living more conveniently and efficiently, which includes a move to more urban lifestyles.
The biggest issue in today’s real estate market is that listings are at record lows. There are buyers who want to buy, and sellers who are afraid to sell for fear that they will not find replacement property.
Solving this conundrum will have huge impact on the economy of this region. Rates are higher today but still historically low so if you are confident in your employment position, a home purchase is likely to be cheaper today than it will be for years to come. Economic recovery automatically brings higher rates.
Today industrial production is up in China, so the stock market rallies and talking heads chatter about economic improvement. Tomorrow something will happen and the conversation will change, just like this week’s weather, 45 to 90−stick around it will change!
The one thing that we can all do to help the economy improve is to become “fair weather” optimists. One of the most powerful drivers of our economy is the consumer and when the consumer is happy we all feel it. So if your glass if half full, celebrate and more will flow.