7 Pieces of Good News About the Economy

In a dismal and stagnant job market, rosy economic indicators may seem like a rarity – even if they aren’t rare at all.

Even as recent data, company news and federal announcements suggest the economy is perking up, the sagging labor market continues to weigh on conventional wisdom. “The public is going to worry about the economy until they see the job market pick up,” says John Canally, an economist at LPL Financial, a Boston-based network of financial advisors.

The job market is a real concern for economists, as well as the public. Consumer spending is crucial to economic growth, so a worried public could hold back the recovery. “The key thing is employment: Is it a leading indicator or a lagging indicator in this situation?” says Doug Roberts, the chief investment strategist for Channel Capital Research. Employment is traditionally considered a lagging indicator, but Roberts says that the pickup so far has been driven by various government stimulus programs, and a more sustainable recovery will need to rely on an increase in consumer confidence that gets people back into stores.

Many companies have cut deeply to control costs and have turned to their reduced staffs to take on extra responsibilities. When anxious workers are stretched thin – and profits hinge on people having jobs and buying products – something’s got to give. “It’s kind of like the paradox of thrift: It’s good if one company [runs tight], but if every company does that, there’s no demand for anyone else’s product,” says Robert Johnson, the associate director of economic analysis at Morningstar.

Still, many companies are posting results that trend upward, and there are lots of other signs that a recovery is underway – even if it hasn’t yet reached the job market. Most (working) economists agree that the momentum has shifted; the question is how fast – and by how much – will the economy bounce back.

“It’s hard for me to find an indicator that isn’t up,” Johnson says. He says he expects the economy to bounce back from a severe downturn with a strong recovery. “My personal disposition is, it’s going to be a lot better than most people think,” he says.

Here are seven recent pieces of good news that may indicate economic growth is on the horizon: