Economy Improving - Unemployment Number Drops 4th Straight Month

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The announcement Friday of another 200,000 jobs added to the workforce for the month of December was great news.  The unemployment rate took another tick down to 8.5%.  Manufacturing, health care, education and even construction saw the addition of new jobs.  Only the public sector saw a loss of jobs.  Thirteen million Americans are still without work and over 40% of them have been out of work for six months or longer.  It is encouraging however that the unemployment rate continues to fall. 

The unemployment rate has fallen four consecutive months and there is no reason to believe that it won't continue this downward direction.  Any continued improvement in the unemployment numbers will only help President Obama as we approach the November election.  Voters have all voiced jobs as the number one issue of the upcoming Presidential election and this administration should see this continued growth in employment numbers as a very positive sign. 

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The Consumer Confidence Index was up again in December for the second month in a row.  The American public believes that their personal income levels will improve over the next six months.  They also believe that the job picture is improving.  Manufacturing activity increased in December with real growth in product as well as manufacturing jobs.  Housing prices continue to fall which is the only negative of what overall seems to be an economy that is slowly but surely improving. 

The final numbers will be coming out this week on December's retail spending and those figures are expected to be very strong.  All of these economic indicators are pointing to a slow but sustained recovery.  If housing prices would stop their downward turn, level out and begin to move upward, we truly will be on the upward path toward a full recovery.  There are still significant issues in the European markets that potentially could affect our economic recovery in the states but so far, European leaders have managed to stay a moment ahead of the potential fall.

I continue to believe that we are in a solid period of economic growth.  Although terribly slow, this is indeed the fashion in which our economy should grow, in a slow, sustained fashion.  Not so many highs and not so many lows.  The market seems to be trending in the same fashion with moderate gains.  On top of all this, we are in a presidential election year and generally, there is upward movement during presidential years. 

A forward momentum often takes place when all economic factors are trending favorably.  Another strong month of employment gains and any positive movement in housing could easily trigger such momentum.