This recovery is for real, according to TrimTabs. As cause for the optimism, the research firm points to a 3% increase in wages and salaries from a year ago and a 9% spike in online job postings. Year-to-date, job postings have surged a surprising 18%.
In fact, TrimTabs says the recovery may turn out to be stronger that estimated.
“This rebound seems to be the real deal,” said Charles Biderman, chief executive officer of TrimTabs. “The key indicators we track suggest the economy will keep expanding over the near term.”
He added: “The economy is performing much better than we realized just a few weeks ago. The benchmark revisions released by the Bureau of Labor Statistics in February revealed that we underestimated the size of COBRA health insurance reimbursements, and thus, growth in wages and salaries.”
While the economy lost 30,000 jobs in February, TrimTabs expects employment to expand in March as the government hires more temporary workers to complete the census, as well as the continued benefits of low interest rates and government stimulus.
Retail investors are pumping a record $1.5 billion a day into bond mutual funds—enabling governments and companies to issue huge amounts of debt, TrimTabs added.
However, once the love for fixed income reverses, the economy will be negatively impacted, the company predicts. “Right now, investors starved for yield are eager to lend money at historically low rates,” Biderman said. “If and when investors demand higher rates in response to accelerating economic growth or deteriorating sovereign creditworthiness, the consequences could be ugly.”
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