It's Your Money: Recovery Signs - WKOW 27: Madison, WI Breaking News, Weather and Sports

It's Your Money: Recovery Signs


MADISON (WKOW)--It can be hard to notice when a recession starts and ends, although there's no doubt when we're in the middle of one.

Signs of recovery can be small and infrequent, at first.  One signal we see almost daily is the stock market.

"People pay attention to the stock market whether they're in it or not.  They watch those ups and downs, they hear the press everyday talk about the dow is up, the dow is down," says University of Wisconsin financial specialist Michael Collins.

And, although he doesn't recommend obsessing over the market's daily gyrations, Collins says the general direction does give us an idea of where the economy is going.

"The stock market as a whole is an indicator of where things are headed."

"If things are starting to head upwards, then regardless of how bleak today's information may be, investors think things are getting better.  It's a signal of things better to come."

And, Collins says that brighter outlook feeds on itself.

"Companies get more optimistic when stock prices go up.  Individual investors get more optiminstic and that bleeds through the system.  In general, consumer confidence starts to go up as the market goes up as well."

There are other, less volatile, signs of where the economy is headed.  Bankrate points to five in particular that are worth watching: personal income and outlays-how much people are making and spending. retail sales, consumer prices, new home sales and employment.

One thing to keep in mind, employment is usually one of the last indicators to turn around when a recession ends.

"We could be in the beginnings of a recovery and still be seeing some historic highs in unemployment.  The job market is slow to respond and we may be looking at a recovery where jobs don't pick up considerably,"  says Collins.

Click here to monitor key economic indicators.

Powered by Frankly