The U.S. labor force may not notice the end of the recession later this year because jobs and income will continue to be weak in the subsequent months, one economist says.
Alan Krueger, a professor of economics and public affairs at Princeton University, expects the economy to begin growing within six to nine months, he said in an interview with Gallup Management Journal released at the start of the year.
He agreed with forecasts of predicting around eight percent unemployment rate in 2009, up from the 6.7 percent at the start of the year. He believes in three to five years the unemployment rate may be even better than it was a year ago.
Economists may call the end of the recession sooner, but when we see some positive employment figures, says Dennis Jacobe, chief economist at polling firm Gallup, that will be the sign of the real turnaround on Main Street.
Jacobe urges businesspeople to not spend on things which aren't a sure bet to increase profits. He doesn't suggest businesses take a gamble on sales improving dramatically immediately. He suggests instead that they strengthen their finances and look forward to the recovery.
He recommends that executives and managers look at consumer confidence levels especially this year, while looking at other metrics, including gas prices, credit and housing markets.
It's all about confidence, said Jacobe. What people fail to understand is that once you've got someone's confidence, it's really hard to break. But if trust and confidence is lost, it's very hard to recover.