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. Federal agencies demand records from SeaWorld theme park


    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood


    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa


    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county


    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.