The latest jobs data from the government showed the smallest job decline in the year. Many consider the job market as the most critical factor in the economy’s recovery. Stocks are on the up and formerly volatile industries showing signs of life but analysts say that businesses have to start hiring and restocking to usher in a real recovery.
Businesses, however, proceed with caution. Most business owners fear that the strong market rally might just be a phase. But with job losses declining, others are even hopeful that the economy will grow in this second half of the year.
Much really relies on employment. With the tremendous spike in unemployment in the past quarters, the buying power of the consuming public greatly decreased. With income from sales dropping, businesses had to consider cutting costs and the first to go are the biggest cost – workers. It’s a vicious cycle for a capitalist economy.
As more and more people get back to generating incomes, the more they’d be able to buy. As revenue increases, business can hire back people. Thus, companies might be holding out for clearer signs not just stocks or job data.
Source: WSJ
