Who Really Grows Economic Recovery?

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According to the Feds, the last recession ended in 2009. The definition of a recession is two or more consecutive quarters of negative growth in our GDP (Gross Domestic Product).

And while the recent levels of GDP growth since 2009 have been pretty anemic it’s still considered a positive economic sign.

Jobs or Work

It’s the old chicken and egg question. Does economic recovery mean jobs or work? You might ask, “Aren’t they the same thing?” Here’s the difference.

We always have work but there are not always jobs. For example, in Montana, with our low population there is great difficulty of many companies to find employees with the experience they need.

So the work is there but there is a very small, qualified workforce available for certain types of jobs.

Consumer Demand

Doesn’t consumer demand come into play somewhere? Sure it does. But customers rarely created demand. That’s marketing’s job.

How much demand was there for the hula-hoop the day before it came on the market? Virtually none.

Once people saw the hula-hoop, through marketing and advertising, a demand was created. Every year there is that one must have Christmas toy.

Entrepreneurs

Many of our greatest innovations have come from single individuals with a vision and a dream. Whether it’s Henry Ford making cars or Mark Zukerberg connecting people, the economy is the big winner.

Additional dollars to pay employees are created out of thin air. There wasn’t billions of dollars just sitting somewhere waiting for Zukerberg to come along and scoop them up.

He created those billions with an idea. It’s the great thing about the US.

The right idea can pay off big.

Some Final Thoughts

Rich and poor all contribute to the economic conditions we experience. I’ve lived through ten recessions and the one similarity in all of them is that consumers still kept spending.

They don’t buy at the same levels they did before the recession but they still find ways to live the best lifestyle available to them. The more money that changes hands the stronger the economy is.

Who really grows the economic recovery? You do. Spend smart but spend.

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