Thursday, September 17, 2009

So the recession is over? Just don't tell the unemployed....

Watch the TV, pick up the paper or flip on the radio for news these days and you're hearing how the economy has turned the corner and that we're now out of recession.

Maybe...but I'm reserving judgement for the time being.

A recession is defined as two consecutive quarters of negative growth, and while we're hearing that tepid growth returned to the economy in June, (0.1% being reported in the Globe and Mail) you'll pardon me for sticking with cheap beer instead of more expensive libations.

Why am I cynical about all the so called 'green shoots' being reported in the media and by government officials? Simple, because our economic prosperity hinges on the willingness of consumers to take on debt.

Car companies, appliance manufacturers...any business with products to sell, they desperately need consumers feeling optimistic. And media outlets hungry for advertising dollars have been hitting us with lots of feel good stories about the worst of the downturn being over. Canwest site had this story out today: What ever happened to the Great Recession?

We're reading how the banks and government officials are all signalling that a return to growth is imminent or already underway. Banks need people willing to borrow money, and with the U.S. heading into midterm elections, to say nothing of Canada's current political climate...elected officials on both sides of the border are eager to tell us what a great job they've been doing.

But then we have news out that the OECD is predicting that our unemployment rate in this country will be checking in around 10% next year. We haven't seen double digit unemployment in Canada for a long time, but still that means 90% of us are working. Making sure the 9 out of 10 still lucky enough to be in the work force are optimistic about future prospects has become the cause celebre of government, banks and big business. The consumer is king, and so we're being told that the garments representing our economy are brilliant and sure beats telling us we're naked.

Even if someone has been forced into a lower paying position, and/or found it necessary to work two or three jobs to make ends meet...its important people feel that the good times will soon be rolling again. Otherwise consumers might forgo that home purchase, leveraging almost the entire purchase price thanks to record low interest rates. Elected representatives may find themselves hunting for a job if voters believe things aren't as rosy as we're being led to believe.

The Kool-Ade stand is open for business, but I'm going to wait another six months to see how well it settles.

Thanks to you Canadian Soapbox is now listed in the Top Ten at Canadian Blogosphere. To help this blog climb even higher click on their icon, then hit the green button to vote - limit 1 vote per day per IP - thank you.
Canadian Blogosphere

No comments: