Don't be afraid of the light

There appears to be some light coming from the other end of the tunnel. The good news is that it does not appear to be an oncoming train. According to a recent survey of leading economists, the end of the recession is in sight.

According to a report issued by the National Association for Business Economics (NABE), a group of 45 economists said they expect economic growth will rebound in the second half of 2009. However, the recovery will be more moderate than what is typical following a severe downturn. More than70% of the panel predicts the recession will end by the third quarter, and 19% of the panel feels the turnaround will not take place until the fourth quarter. What is really good is that none of the panelists expect the recession to continue past the first quarter of next year.

Another indication that light is at the end of the tunnel comes from the Credit Managers' Index (CMI), which is issued by the National Association of Credit Management (NACM). With four straight months of upward movement, the CMI data for May shows an improvement from 44.3 to 45.4, which equals a level not seen since October 2008. According to Chris Kuehl, Ph.D., NACM economist, this does not mean the economy will come roaring back in the next few months but rather that the second quarter will be the last quarter of negative GDP, as the third quarter should show some growth.

The CMI is based on a survey that reveals some interesting factors. For example, sales jumped from 37.4 to 41.8, representing one of the biggest increases in the last several months. There has also been substantial movement in the new credit sphere, which indicates that businesses have started to lean toward expansion once again. In addition, the CMI is now showing that credit is again being extended. Kuehl also notes that on the plus side, there has been expansion in the energy sector as well as in the growing field of medical manufacturing, and that there will likely be more aggressive growth in these areas as other data now indicates that capital expenditures in the manufacturing arena are growing.

Should you still have some apprehension concerning the light at the end of the tunnel, you may be surprised to learn that it is probably being generated by Economic Boomers, more commonly known as Baby Boomers. "When the American economy recovers, it will be on the backs of Baby Boomers," says Steve Howard, author of Boomer Selling, from ACTion Press (boomerselling.com). According to Howard, Baby Boomers hold more than 70% of the country's wealth and a behavioral trend that indicates that they are willing to spend that money. They are simply more selective than before the recession.