In a follow-up to this Wednesday’s post about help for job seekers, I wanted to look at the controversial issue of economic news, our spending behavior and which comes first. My view is that when we’re feeling confident about our personal finances, we feel comfortable spending money. And when 300 million people spend even a bit more, the economy ticks up. So I believe that a variety of factors (i.e. the financial markets) may have gotten us into a bad economy, but good news, a better attitude and expectations of a better tomorrow will get us out.

imageI picked up this bit of news: Jon Fisher, an entrepreneur and professor at the University of San Francisco, analyzed the relationship between housing starts and unemployment, noticed the strong link and last year predicted an unemployment rate of 9 percent. He was pretty much right on.  Now that housing starts are bottoming out, he believes unemployment will peak at 10 percent and then come back down.

So much in the news is just the gloomy facts that get us worried and sitting on our money.  Just what the economy doesn’t need. The Greg MacSweeny post I referred to does a great job reporting the news with the context and a forecast. Yes, unemployment may hit 10 percent, but that seems to be a turning point. As there always is in economic cycles.



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