Economists say the longest post-World War II recession has officially ended; apparently, we have been in recovery since June 2009. They base this assessment on the amount of goods and services produced in the U.S., among other measures.
But with the unemployment rate hovering around 10 percent, a depressed housing market and tight business and consumer credit, many could argue the bounce back has hardly been robust. The concern here, certainly, is consumer confidence and spending.
But the transportation sector historically has been an indicator of future economic trends. If true, we should be encouraged: The Dow Jones average of transportation stocks was up a remarkable 8 percent this year through October. But the big question is, how sustainable is this recovery?
The peak shipping season arrived much earlier than in years past. Inventories rose 1.3 percent, the steepest incline in two years and much more than anticipated. Was this merely a restocking? Was it simply a precautionary move to ensure cargo arrived on shelves in time for the holiday season?
Despite the “recovery” of 2010, we can’t deny that businesses, faced with uncertain demand and unknown tax policy, are hesitant to invest. We also can’t ignore that consumers remain saddled with debt, high unemployment and, in many cases, negative home equity.
Add to this the results of the recent election and the possibility of unanticipated threats and 2011 is a wild card. I believe we’ll see much of the same in 2011: unexpected peaks and valleys as consumers and businesses adjust and respond to economic developments, the government’s security enforcement initiatives, and geopolitical events.