We are back with a promising economic forecast for December 2009 and are proud to say that the unemployment rate went slightly down to 10% and based on the November job report only 11,000 jobs were cut. The report also indicates major improvements in the months ahead. The home and auto markets had great increases in November and the global markets are stabilizing as well but what about Dubai?

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November is a slow month as the winter approaches; the economy starts to slow down in all areas and prepares for a major holiday boom for the retail industry. This month we discuss three main factors that will impact our economy. We will discuss three basis elements that impact our overall growth out of this recession. The first will be the retail sales indicator, followed by the housing and unemployment markets.

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The Economic Outlook is back and its already October. It’s that time again to take a look at the economy in a nutshell and understand where the month will take us. The big highlight of the month is the G20 summit which is well underway and is not looking very promising, followed by the cost of Gold and finally the troop surge that the generals are asking for in Afghanistan.

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Its time for September’s Economic outlook and believe it or not, it is promising for once as the economy has already hits bottom. The interest rates continue to remain low, the housing market picked up quite a bit and the consumer spending index has been very promising and positive.

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When people are fearful, be greedy. This is the best advice you will hear during a recession or an economic downturn. As we discussed in our previous articles, this recession is in most part mental, it is worst than it needs to be due to the lack of confidence the people have in this country and therefore due to fear, fear of losing employment, fear of refinancing, fear of diminishing home values, fear of layoffs and lack of credit are all reasons that people’s wallets have been hiding.

So what should you do? Spend or Save?

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In a recent interview with Timothy Geithner, he was asked about the role the government plans to take in the banking system and what he wants to accomplish with this new trillion dollar spending bill.

He was confronted about the inequality and imbalance of his decision to replace the management of General Motors but yet remains on the sidelines when it comes to Citi Bank and some of the other major financial institutions.

But Why?

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Consumer confidence has now been up for three consecutive months and that is looking good, despite the lack of job growth, it seems that consumers are starting to realize the recession is nowhere near over and are choosing to start leaving their lives normally again. This is a big surprise.

As many believe this is a simple fluke and will start dipping again, I like to believe it is real and will continue to grow. Most economists will tell you that job growth is directly related to consumer spending and historically this has been found to be true BUT job growth alone is not the only factor that pushes the consumer spending index up. The people’s confidence in their own situations does too, and I think people have just about had it with all the down talk on the news and the negative effects that talk shows and gloomy economists seem to keep playing on. Its not doomsday, its just another recession, not the worst we had and not the smallest but it will go away and the less afraid we are of it, the quicker it will go away.

The only difference is that now you need to spend within your means and thats how it should have been to begin with.

Dont you agree? Leave us a comment

President Obama’s plan is the talk of all media everywhere. Many are non believers and are criticizing the president and his treasury secretary for spending too much money and having too vague of a plan. The plan has already promised to create or help put 3.6 million Americans to work by the end of 2010. The plan also speaks to tax cuts for the middle class and tax credits for individuals purchasing a home in 2009 or an American car. Despite what it promises to do and what it will actually deliver, the President stands behind his plan 100% and believes that it will take time but will work.

However, there is one idea that got my attention simply because it seems like it would work.

There has been talks of boosting the market by offering a special incentive called “no capital gains” for securities purchased before 12/31/09. This would create an urgency and reinforce people’s confidence in the market. There would however be some exceptions to the proposed idea, but it could boost small business purchase decisions and help the market to a faster recovery.

In this economy, it is difficult to remain positive. It is even more difficult to feel confident that the economy will turn around.

We are faced everyday with new challenges as we hear of continuous problems facing our economy, some have past, some are present and some bad times are still ahead. The reality is just that, times are not the best this country has seen nor is this the best time you’ve seen.

It is easy to get caught in all the news, the gossip and the general media out there and simply get afraid of things to come.  The reality however remains that this is the exact attitude that will keep us where we are, and keep us from getting out of this mess. The economy is directly tied to consumer spending and therefore the main reason it is down, is the lack of confidence from people in the economy.

We discussed earlier that the way to fix this economic mess is not to inject more money by borrowing it, but rather recirculate existing money within the system to better use.

Regardless of what the ultimate fix is to this economy, it is important that consumer spending increases and recirculates the money in retail institutions who can then remain profitable and keep more staff on hand which prevents unemployment. I am not advising that you go out and spend all your money as you would normally do, I am simply suggesting caution when spending instead of fear. Business owners and managers who manage with the fear of losing everything end up losing more, as they do not pay attention to their business but spend time driving themselves mentally crazy.

Make correct choices that allow you to continue living life while remaining cautious of your spending but not keeping you from your regular day to day activities. If you have to make changes, reduce your habits, but do not change your way of life.