It was for the first time after six years that the US economy was trending positive for a non-stop 8-week period. The dream run was cut short in mid-April. Personal spending rose continuously for six months until March, according to a Government report released on the 3rd of May 2010. This came in part due to a rise in personal income, from 0.3% or $32.3 billion in April after a 0.1% rise in the previous month.

Personal savings were at 2.7% in March, down from 3.5% in February. This was the 3rd consecutive month in decline. This decline in part reflects the growing need to tap personal savings to accommodate declines in income due to job loss. Personal savings, retirement accounts, and home equity have been shrinking for many Americans due to the economic downturn and unemployment. What was once a nest egg for the future, is now a safety net in depletion for many. However, this decrease in personal savings also reflects an increase in spending. Shown by an increase in retail sales, this in turn is good for the economy and will eventually contribute to job creation. Exports however, grew by a marginal 5.8%, a marked decrease from the 22.8% growth rate in the last quarter of 2009.

The government data on 30th of April showed the U.S. gross domestic product, the broadest indicator of economic recovery, rose at a 3.2% annual rate in the first quarter of 2010. This was the third straight quarter of growth of the US economy. The economy grew at 5.6% in the last quarter of 2009. The annualized rate of economic growth takes the stretch over a three-month period and projects what it would be over a 12-month period.

Various job reports released by the government also reflected that the scenario may finally be improving. The private sector hired people for the third successive month in April with an addition of 32,000 jobs. The nation as a whole added 262,000 jobs in April and this did not include the census workers hired by the government. But yes, the unemployment rate still holds at 9.7%. Medium sized businesses added an estimated 17,000 jobs and large enterprises added 14,000. Small business contributed with another 1,000 jobs, a sector grappling with problems in accessing the much-needed credit to grow coupled with the regulations of healthcare and related costs. Employers are still slow to hire while they look to expand. And although the nation’s planned job cuts were the lowest in April in nearly four years, the government has trimmed 14,973 jobs during the same month.

True, the recovery is slow. “Companies have cut to the bone, cutting off arms and legs. Now they are shifting from defense to offense,” said John Canally, an economist for LPL Financial.
Yet there has been an increase in economic activity, supported by legislative push by way of incentives to employers for job creation. The service sector and the manufacturing sector have reported gains for the quarter ending in April but there was a drop in the goods-producing sector and the construction industry.

Truckers, railroads and other transportation companies are seeing better business after a gap of four years. This sector falters a good 6-12 months ahead of a broad recession and, similarly, sees a recovery ahead by the same margin of 6-12 months. The stocks are already doing well. Truckers, shippers and global delivery firms are all picking up barring the airlines which are grappling with a different set of problems. FedEx and UPS are riding high on the back of volcanic ash.

A clear positive trend is reflecting in the broader economy. But the average American would like to see more hiring before agreeing with the cautious optimism of the economists. Even when the economy and job market finally stabilizes, many Americans will be starting to save for their future all over. But before that happens, a delicate orchestration of events has to unfold within the complexity of the American and global economic system.

The U.S. Small Business Administration (SBA)’s flagship lending program has processed more than twice as many loans in the last quarter than it did in the period a year ago. 16,558 loans were passed versus 8,205 in the previous year.

The SBA spokesman, Jonathan Swain, stated “These are dollars that are going in the hands of small businesses that are not only saving jobs but also creating jobs.” While job creation remains the main focus for President Obama, he acknowledges that it is the private sector which can create jobs and that there is only so much help the federal government can provide. Of course, there are many factors involved in economic recovery. The SBA’s lending program is surely assisting small businesses, but to which degree it contributes to job growth is not entirely certain. Nonetheless, the trends in hiring figures look promising.

The month of March has seen the highest hiring figures in the last three years. Against a forecasted gain of 184,000 jobs, the Labor Department claimed the economy added 162,000 jobs. This happens to be the third successive month of job gains. No doubt, short-term factors have contributed to this positive trend. The Census Bureau has added 48,000 for the once-in-a-decade headcount of the US population. The severe winter storms had also contributed to the positive gains. Nonetheless, these figures compare positively to earlier figures, and afford some optimism for the foreseeable future.

Yes, the unemployment rate remained at a forecasted 9.7 % as expected. But amazingly, job growth has occurred across several, diverse sectors of the economy. It is said to be the best within the last four years, with 60% of industries having added jobs. Retailers added 15,000 jobs, leisure and hospitality increased by 22,000 jobs, and manufacturing contributed with 17,000 of which 2,500 came from auto companies and their ancillaries. Of course, the duration of unemployment has been too long for many to endure, and many of the unemployed have stopped looking for jobs. They need to stay attuned to the changes. Calling it “a resilient recovery,” the managing director of Economic Cycle Research Institute, Lakshman Achuthan, stated “All these areas are stabilizing and moving forward. That’s the hallmark of a recovery.”

Manufacturing has grown for the eighth successive month in March since July, 2004. These strong numbers arise out of new orders and the rebound of production to maintain larger inventories. The Plastics and Rubber industry is the only manufacturing segment which has contracted. This sector has slipped on the employment front; one expects that trend will reverse as demand rises. This positive trend is currently being revealed in the United Kingdom and China, and hopefully soon, the United States as well.

FINTEL, a web based financial data company, has termed the trend of economic stabilization as positive and optimistic. FINTEL’s COO, Boris Nenide, suggests that “these trends will be revealed in our financial database of over a million individual companies that currently navigate through every stage of the economic crisis. For academic researchers, economic and business analysts alike, industry metrics remain an important tool for gaining insight into how these trends have affected financial performance of companies across 2,500 industry segments in our data.” Thus, future research may reveal to which degree federally-backed, lower-interest loans helped small businesses gain the working capital needed, not only to survive the economic storm, but to sustain job growth as well. The answers are still in the future, but hopefully they assure us all that the noble efforts of the SBA did, indeed, contribute to economic recovery and stability.