3 signs the economy is rebounding

Looking for the light at the end of the tunnel? Watch for these signs that the economy is bouncing back.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Janice Revell, Money Magazine senior writer

1. Managers say things are looking up
CLICK HERE

(Money Magazine) -- Why it matters: The stock market and the President's economic team have been flashing hopeful signs, but what really matters is whether companies are feeling positive about their prospects. When they do, they'll expand, which boosts economic growth.

What to watch: The best measure of business sentiment is the Institute for Supply Management's nonmanufacturing index (find it at ism.ws). The rebound has arrived when the index hits 50 and stays there, says economist Nariman Behravesh.

Recent reading: Grim. In March the index was 40.8, down from 41.6 the prior month.

2. Housing supply starts to shrink

Why it matters: The real estate collapse is what led us into this recession, and we can't emerge until housing turns around.

What to watch: Inventory data from the National Association of Realtors (realtor.org; click the Research section). You want to see the supply of unsold homes at about six months.

Recent reading: Slowly improving. At the end of March there was less than a 10-month supply, down from 11 months in the fall.

3. Temps, temps, everywhere

Why it matters: When business first picks up, companies bring in temporary employees, holding off on full-time hires until they're sure of a recovery.

What to watch: The ASA staffing index (americanstaffing.net; click on Staffing Statistics), which shows weekly changes in the number of temp workers. It's a good sign if it rises for at least three consecutive months.

Recent reading: The index has been flat since February, but at least it's not falling.  To top of page

Send feedback to Money Magazine
Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Meet the kids dressed as Oscars red carpet stars By now, you've seen the red carpet looks from the 2015 Oscars. But you haven't seen 5 year-olds dressed up like A-listers at the awards, until now. Photographer Tricia Messeroux and designer Andrea Pitter recreated the pint-sized looks in just 36 hours. More
Flying economy doesn't have to be miserable For those willing to shell out just a little extra, several à la carte services offer experiences usually reserved for First Class passengers. More
Consumer Reports' Top Picks - American cars are back The magazine's favorite cars include three American models for the first time in years, thanks to a big boost from Tesla. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play