Highly publicized global unemployment news continues to worsen as worldwide companies attempt to batten down the hatches to survive the current economic turmoil. Unemployment, however, is a lagging economic indicator and often continues to deteriorate despite industrial improvement and recovery. Simply explained, during times of business uncertainty, overly cautious and fearful employers tend to continue to cut expenses and refrain from employee rehirings until they are absolutely certain of economic recovery. In consequence, despite dismal 2009 unemployment data, we believe investors should look beyond the statistics. Investors should concentrate more on leading economic indicators such as declining business inventories, improvement in business and consumer sentiment, etc. These statistics, we believe, are better gauges of future industrial recovery.
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