The Federal Reserve gave an upbeat assessement of the economy yesterday. It said “Economic activity is leveling out,” and “We’re no longer at DEFCON 1“.
Two good things are coming out of this. The stock market is an its annual high and the 10:00 News is “less bad”- both things help the business person’s mind rest a bit easier.
But small business will not truly be out of this Great Recession until the following things happen:
1. Banks need to ease up on credit and start lending money to small business. We are still in a credit crunch death spiral where small businesses can’t get credit from banks and vendors are not paying their bills on time.
2. Businesses need to start hiring again and at supportable salary rates. Some people are finding new jobs but at less then they were making. It is essentially a jobless recovery.
3. Increase in consumer confidence. Less bad news and an upward stock market helps. But without jobs, people have no money to spend. The holiday season will be a key barometer.
4. Homes need to start to sell. Most of people’s wealth is tied up in their homes. If they can’t sell them and buy new ones, they are stuck.
What are the barometers you are watching?
