After a year of uncertainty, the economy now seems to be picking up again. This is because retail sales, factory production and home sale are showing signs of recovery. The unemployment claims are going down. Companies like ‘General Motors’ and ‘Macy’ have recently announced hiring plans. Lending to businesses by banks has started to increase. Following this, investor sentiment has improved as stock market indexes have started to reach back pre recession levels.
Economists and businesses have debated whether growth is real though there are doubts about whether it is going to accelerate much. President Obama too seems optimistic and wants to move ahead prudently. Economic downfall has been arrested and so expectations have risen. Factors restraining growth are household debt, strained state and local budget. Household spending can be further crimped due to rise in food and energy prices. Unemployment still remains a concern as it remains at 9.4 percent and could rise higher as more people who stopped searching for jobs now want to return back to work. And over the next year, not enough jobs will be created so as to help out the eight million people who were unemployed during recession.
So, even when the president seems to be optimistic and the economy is slowly coming up, but bringing significant difference in jobless rate will not be easy. It is believed that unlike previous recession, this time the economy is not going to ignite all of a sudden. Skyrocketing growth is not expected by anyone. In-fact, industry leaders are talking of stable improvement. Tom Henderson, spokesperson General Motors, says, “We don’t expect a big upswing in sales.”
But overall, yes, sales have started to improve and lending by banks to small businesses rose in fourth quarter of last year first time since the end of 2008.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to