TUESDAY SEPTEMBER 15, 2009

Employment Blues

Many pundits doubt the economic recovery because the employment statistics are still weak. As their tale of doom goes, economic activity like retail sales (released later today) is likely to remain lackluster until employment rebounds. I continue to believe that the employment trends are following the typical recovery track and will probably turn positive late this year or in the first quarter of 2010.


One reason is that corporations are returning to profitability. After making difficult restructuring changes (closing plants, lay-offs, consolidations, etc.), the cost structures of most companies are pretty lean. Any improvement in the top line, a.k.a. revenue, should jump start profits. And when companies are profitable, they look to grow.   When they grow, they hire.


The profits picture has shown continuous improvement, with many companies recently announcing upgrades of their business forecasts. If these forecasts are correct, better employment stats are not far away. Patience is required.

POSTED AT 1899-12-30 07:34:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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The opinions expressed here do not represent the views of Alliance Financial Corporation and Alliance Bank, N.A. This communication is not an offer or solicitation for the purchase or sale of any security, is for general informational purposes only and does not provide personalized investment advice. When making personal investment decisions you should consult your investment adviser or rely on your own research. Copyright 2008.