Today, on the Fox News' show "Cashin' In , I bet that in one year, unemployment will be at or below 7.5%. I backed up that bet with some serious, albeit humorous (for everyone but me, I assure you) potential consequences. We'll get back to the consequences in a moment. Most people, including those folks at Cashin' In off camera immediately after I made the prediction, have been asking me why I think that unemployment will get to such a comparatively low figure in only 12 months. Few if any other people are predicting this.
There are a couple of key indicators that tell me that not only are we in a recovery, but we are in the beginnings of what economists call a "V shaped recovery, or as investopedia describes it ""a V-shaped recovery represents the shape of the chart of certain economic measures, such as employment, GDP and industrial output. A V-shaped recovery involves a sharp decline in these metrics followed by a sharp rise back to its previous peak. ". I talked about some of those indicators in this article, http://www.opednews.com/articles/Economy-Recovering--Repub-by-Steven-Leser-090724-283.html . Since that article we've seen even more signs. Here is what leads me to believe we are in for a robust recovery:
1. As I noted from Kudlow's articles including his July 23rd "Recovery Canaries in the Economic Coal Mine ", http://www.cnbc.com/id/32105734/ Corporate income is up across multiple sectors
2. The housing market is recovering briskly - Sale of homes is rising.
The July report http://news.yahoo.com/s/afp/20090821/bs_afp/useconomypropertysalesbank_20090821210529 that came out August 21st showed that existing home sales in July rose 7.2% to an adjusted rate of 5.24 million units. This indicates a stabilization of the housing industry is well underway and if this is what is happening, it would have an immense positive effect on the economy.
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