Unemployment has risen to a national average of 9.5% and many still think that it will go higher but we at elementary-finance.com want you to understand that this doesn’t necessarily mean that the economy isn’t improving.
First, let me say that to those of you who have lost your job because of the economy, this will do very little to make you feel better and I’m sorry. The highest concentration of those applying for unemployment are those in the manufacturing business and if you’re one of those, hang in there, it will get better.
Let’s take a look at why the rising unemployment rate may not be such a large cause for alarm. We have to see the economy in a certain order. Experts say that the stock market is a forward indicator. This means that it can be seen as a crystal ball of what may be coming in 6th months.
Now that we know what may happen in the future, now we look at the real world. The world’s businesses can’t pay their bills with the money that will come in later on. Future earning don’t mean anything so businesses have to respond to the money that they have now and amount of orders that they have from the many other companies who have been feeling the effects of the down economy.
The unemployment rate continues to rise because businesses are continuing to feel the effects of the economic downturn of the past. It will be 6 months or more before they feel the positive effects of an economy that seems to be improving.
Although we as a country feel badly for all of those who continue to join the ranks of the unemployed, for anybody who is investing in our economy, it’s important to remember not to get too pessimistic over a bad report.
A knowledgeable investor will know the reports that speak of the past and the reports that speak to the future. We shouldn’t be concerned with where the economy has been. The past doesn’t make us money. Only the future does so look forward and see that while slow, improvement appears to be here. Be cautious but don’t miss the next move.