Posted by Matt Purdue
I’m not sure where I get off paraphrasing the eminent Winston Churchill, but I will do it anyway: It’s not the beginning of the end, but it may be the end of the beginning…of the recession, of course. U.S. stock markets were up in March, impressively so. The Dow was up 13%, and the Nasdaq up nearly 16%. The equities markets are irrational creatures, though. A geopolitical event or a slip of the tongue can send stock in investors screaming for the exits.
But there are more reliable indicators that suggest the U.S. economy’s plunge is slowing. That great engine of our economy, the consumer, is just beginning to thaw. The rate of decline in retail sales and consumer spending is decelerating, and we’re seeing some improvement in both home sales and home starts. By no means is the picture rosy yet. What we’re witnessing now is that this once pitch-dark economy is starting to show some shades of gray. Most analysts predict that gross domestic product will probably decline sharply in the first and second quarters of this year, before bouncing back late in 2009 and into 2010.
The huge bugbear, however, will continue to be unemployment. Many experts agree that unemployment, which just hit a 25-year high, will reach 10 percent before this is all over. The worst part of this scenario is that employment almost always lags during an economic recovery. So even as indicators like durable goods orders, retail sales and home sales improve, unemployment will continue to slide. This is because as the recession begins to ebb, consumer who are relatively financially stable and have been sitting on their cash will finally come off the sidelines to boost some statistics. Meanwhile, many unfortunates will continue to get laid off. It will set up a strange juxtaposition in this country: While Mrs. Ayala is getting her brand-new washer and dryer delivered, across the street Mr. Lemont is getting a visit from the county sheriff with an eviction notice.
This is going to be especially challenging for those of us in communications. On one hand, we’ll have media and the blogosphere telling tales of good news and recovery. Alternatively, they’ll also be digging into story lines about people, communities and industries left behind by the recovery. For the foreseeable future, then, we’re going to have to become very adept at telling two sides to every story.
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