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2010 Outlook

Cautiously Optimistic: Outlook For 2010

On the heels of Christmas, all eyes turn to the economy and the outlook for 2010. This time of year, organizations big and small look to implementing, or in some cases, completing their business/operational plans and this year’s outlook is significantly brighter than last year.

Last year, I bet that the economy would improve in the 3rd and 4th quarter. Fortunately, it did begin to rebound in the 3rd quarter. There was simply too much money pumped into the system for it not to improve.

So what can we expect from 2010?

Improvement. Despite the recent negative employment news, it definitely looks like the employment market has hit bottom and by February we should start to see signs of an improving labor market. Based on the Fall numbers, auto manufacturers should start to become profitable again, but overall consumer spending will remain weak and choppy. Too much wealth has been destroyed in this recession and it will take some time for real income to rise, which is necessary for strong retail growth.

The dollar remains weak giving strength to exports, local and state government continues to struggle, and commercial real estate continues to tank.

On the plus side, the first half of the year looks positive, especially for stocks. However, inflation or fears of inflation and higher rates becomes the story of the second half of the year.

2010 looks positive. It is 2011 that I’m worried about.