Evidence Mounts of Strong Recovery

Whitehouse, M. (2010). Evidence mounts of strong recovery. Retrieved April 14, 2010 from: http://online.wsj.com/article/SB10001424052702304798204575183683432202678.html?mod=djemalertNEWS

This article, published on the Wall Street Journal’s Web site, describes an optimistic view of a strong recovery that is in the works within our economy. There was a 1.6% increase in retail sales in March from the previous month and 7.6% increase compared to March of last year, causing some optimism that the economy can restore the 8.2 million jobs lost since the recession began. Many economists are saying that their previous growth forecasts were likely underestimated. Investors like this news also; the Dow Jones Industrial Average was up an additional 0.94% today to close at 11,123.11, which is a high that has not been seen in about a year and a half. Economists now predict that consumer spending will increase at an annualized rate of 3% in the first quarter. Another factor that affects retail sales are interest rates, which Fed Chairman Ben Bernanke has recently indicated will remain low for awhile longer to support retail growth. This article describes good news for retailers and service providers if the predictions can hold true. This is important information for managers to understand because they must know the economic indicators that point to where the economy is heading so they can take proactive steps to prepare for and benefit from the impending changes.