4 Reasons 2009 May Be Looking Up For The US Economy

2008 was a devastating year and many believe that it is virtually impossible for things to get any worse for stocks, exchange traded funds (ETFs) and other investment tools.

Jerome Idaszak, of The Kiplinger Letter, lists four reasons why things could be looking up for the upcoming year:

• Low Interest Rates: The prime rate is at 3.25% and with help from the Federal government buying up more debt, it looks like it will be staying at this low level for a while, making it cheaper to buy or refinance homes, and take out car loans and receive student loans.
• Low Prices: Lower oil prices, modest prices for food, other commodities and goods and services, and low inflation rates will leave more money in the pockets of consumers.
• Federal Spending: President-elect Barack Obama and his administration plan a stimulus of over $800 billion in tax cuts which should jump start the economy and create a few million jobs.
• Public Confidence in Washington: Roughly 70% of Americans are optimistic that Obama and his administration will grow our economy and consumer confidence is the key element to get us out of this mess.

Although optimism is the way to go, one must be mindful of the depressing housing market, tight credit markets, and other drags on the economy like declining exports, a weak auto industry and reduced demand for oil and gas. Experts anticipate U.S. exports to shrink by 0.5% in 2009.

Look for the market to make a comeback before the overall economy. History suggests that this is the trend, but history has been proven wrong a lot lately. Watch the trend lines to be sure.

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