Make us your home page

Are we in a financial recovery yet? Maybe — or maybe not

We've officially entered the murky area of the recession. • National unemployment figures released Friday showed the free fall of job cuts has slowed. Yet, we're still hovering at a record number of long-term unemployed, more of whom are exhausting their insurance benefits every week. • As we trudge through the 17th month of the downturn, economists in coming weeks and months will grapple with that oft-heard query: Have we seen the bottom? • Don't look for a clear answer. • It's the period in this economic cycle during which economists cement their reputation as multi-limbed creatures; they're constantly saying, "On the other hand … " • The only thing most agree on is that any recovery, once it starts, will likely be slow and gradual. • Here's ammunition to use at cocktail parties (or layoff parties) to build your own case for where the economy is headed.

Recovery on the horizon

1 The employment free fall has stopped. Based on past downturns, unemployment tends to continue rising after a recession ends. But the pace of rising joblessness has slowed considerably. New jobless claims nationally this week fell to their lowest level since January. In March, Florida's unemployment ticked up a mere tenth of a percentage point, from 9.6 percent to 9.7 percent.

2 The stock market is up nearly 30 percent from its March low. Despite concerns this is merely a bear market rally, investors appear eager to jump back in, shrugging off bad news. Look at a week ago: Fears over a pandemic flu were peaking and Bank of America shareholders forced Ken Lewis to give up his role as chairman, yet the Dow rose almost 2 percent that week.

3 More consumers in Florida think the worst is past based on a surge in consumer confidence. Thinking just might make it so. Confident consumers are starting to spend again, albeit frugally. Discount retailers like Wal-Mart reported better-than-expected sales in April.

4 Businesses slashed inventories almost 3 percent last quarter. That leaves them lean, flexible and poised to spend quickly to restock warehouses.

5 Nine of the 19 financial institutions enduring the federal government's "stress test" don't need any new capital.

Bigger slump ahead

1 Office and retail developers are struggling. Federal Reserve officials call the depth of the commercial real estate downturn the single biggest determinant of whether the recession rolls into 2010.

2 Companies may not be firing as many, but they're not aggressively hiring again. About 2.4 million Americans are collecting federal emergency unemployment compensation, but many are on their final installment. An estimated 1.5 million will have run out of benefits between March and August 2009.

3 The drop in home prices may be gradually bottoming out, but Florida is expected to lag most states. According to Zillow, 21 percent of the home mortgages taken out this year in the Tampa Bay area are already underwater with borrowers owing more than what their homes are worth.

4 The debt monster is alive and well. Consumers fell past due and defaulted on their credit cards at record rates last month, the second consecutive monthly high. According to Fitch Ratings, chargeoffs are up 44 percent year over year and up 18 percent just since the beginning of this year.

5 The federal government's long-awaited "stress test" indicated the country's largest banks collectively need another $75 billion to handle potential losses. The two biggest banks operating in Florida — Bank of America and Wells Fargo — could use a combined $47.6 billion, regulators say.

Are we in a financial recovery yet? Maybe — or maybe not 05/09/09 [Last modified: Saturday, May 9, 2009 4:31am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Former Sen. Greg Evers, advocate for law enforcement, dead at 62.

    State Roundup

    TALLAHASSEE — Former State Sen. Greg Evers, the Baker Florida strawberry farmer and veteran politician, was killed in a single car crash hear his home in Okaloosa County. The Florida Highway Patrol confirmed the death late Tuesday, but deferred any further information pending an investigation. He was 62.

    Former Florida Senator Greg Evers, R- Milton, was a passionate advocate for law enforcement and corrections officers. He was found dead Tuesday afternoon in a car crash. He was 62. [SCOTT KEELER | Tampa Bay Times]
  2. Foundation Partners buys Anderson-McQueen Funeral Home


    ST. PETERSBURG — Anderson-McQueen Funeral Home, the Tampa Bay area's largest family-owned funeral company, has been sold.

    Anderson-McQueen Funeral Home, the Tampa Bay area's largest family-owned funeral company, has been sold.
[CHRIS URSO   |   Times]
  3. Water Street Tampa unveils video showing downtown's transformation


    TAMPA — Water Street Tampa, the sweeping, 50-plus acre redevelopment project in Tampa's urban core, has unveiled new images and video of what the downtown district will look like upon completion.

    Strategic Property Partners released a conceptual image of what the Tampa skyline will look like once its redevelopment of 50-plus acres of downtown will look like. [Photo courtesy of  of SPP]
  4. Florida ranks high for workplace equality between men and women

    Working Life

    When it comes to the workplace, Florida ranks fifth in terms of gender equality, a WalletHub study released Tuesday found.

    Florida ranks high in terms of equality between men and women in the workplace. Pictured is Sandra Murman, county commissioner in 2015, talking about the differences in pay between men and women. | [Times file photo]
  5. Treasury secretary's wife boasts of travel on government plane, touts high fashion


    U.S. Treasury Secretary Steven Mnuchin's wife, Louise Linton, boasted of flying on a government plane with her husband to Kentucky on Monday and then named the numerous fashion brands she wore on the trip in an unusual social media post that only became more bizarre minutes later.

    Steven Mnuchin and his then- financee Louise Linton watch as President Donald Trump speaks during Mnuchin's swearing-in ceremony as  treasury secretary in the Oval Office of the White House on Feb. 13. [Mandel Ngan | AFP via Getty Images]