2010 gets early start to recovery

A day before the first day of 2010 some good news came out of a weekly jobless claims report in the US. It shows that American workers applied for jobless benefits in continuously smaller numbers than the previous week. This is the 17th consecutive week with the same trend. This means that since the trend began, the economy has been slowly improving. It is also better than what most economists expected.

It appears that 2010 may feel like a recovery year, or at least the beginning of one. In fact, 2009 was the end of the recession, but it never truly felt like a recovery. Towards the end of 2009 it felt more like a flat space between the end of a recession and the beginning of a recovery. There were and still are contradictions in the data that comes out all the time. On the one hand, you have a climbing stock market and the trend of improving jobless claims I already mentioned, but on the other hand, we still see a slumping housing market, (the seeds of this recession) an exceptionally high (and climbing) US debt and a still very bad unemployment rate, currently at about 10%.

With that said, it still feels like we are starting to build some momentum going in to this new year and I think this year will at some point begin to feel like a recovery. That’s not to say that there won’t be more bumps in the road, I am sure there will be, but I am looking at the bigger picture and it appears that in this big picture, some sun rays are starting to shine through.

So, if what I am saying is correct about 2010, what does this mean for us? Well, it depends what your current situation is and where you live. If you are American, then there is a better chance you will find a job if you do not currently have one. If you are employed, then that insecurity in the back of your mind about keeping that job will start to subside. If you are Canadian, you haven’t felt this recession as bad, but you still either lost your job or you know someone who has. That should also begin to turn. Also, as US consumption begins to increase again, Canadian exports will start to lift the country back up. Exports are extremely important to the Canadian economy and although it should rise in 2010, there is something concerning about it. Many economists think that in 2010 the Canadian Dollar will be worth more than the US Dollar. If this does occur, it will undoubtedly hurt Canadian exports, which account for almost 40% of the entire Canadian economy. Regardless, 2010 should be better for Canadians as well.

Europeans should also do better in 2010, although some European countries have various concerns to worry about that might peak in 2010. Emerging markets have, for the most part, not been hit quite as bad as the US, Canada and Western Europe and 2010 should be relatively good for most of them.

All in all, although there are still concerns in the global economy that have the potential to derail a recovery, if things continue on the path of progression, 2010 should be a better year than last year.