What's next

Abstract

If you're still baffled by the state of the U.S. economy, you're not alone. To find out what's going on, Taylor asked top economists for their take on the situation. Their answers aren't as bleak as you'd think. Overall, economic fundamentals are improving; that means we can expect to see positive effects, such as increased hiring, business spending, and better wages, soon. The housing market, which continued to boom in the past few years, is still in pretty good shape. But Taylor warns that rising interest rates and accounting troubles at lenders such as Freddie Mac, combined with high jobless figures and foreclosure rates, could indicate trouble for the future. Although business spending has not picked up yet, economists are confident that it will soon. The past few quarters have finally seen some small increases in certain business investments, such as software. Trainers have noticed that while larger firms are still doing belt-tightening, midsize firms have started to turn-around and are planning for more training, which they haven't been doing for the past couple of years. Unemployment, however, is a lagging indicator. It will take a while into an economic turnaround before companies get confident enough to start hiring again. Experts say it could be well into next year before we start to see jobless figures drop.