Are good times really here to stay?
Until there is a recovery in jobs growth, the state of economic recovery has to be called into question, according to Chad Padowitz, chief operating officer of Wingate Asset Management.
Speaking at a Wingate investor breakfast last week, Padowitz said while economies seem to have recovered from the financial crisis and the bank sector is doing well, jobs growth has remained pretty weak throughout the world.
“Until that changes, the sustainability of the [economic] recovery has to be called into question,” he said.
Padowitz also warned that while earnings growth for companies in the advanced economies was “quite good”, it was more due to lower levels of bad debt and loan provisions and falling costs, rather than increasing revenue streams.
The quality of earnings growth was also mediocre, Padowitz said. The removal of government stimulus from the world economies would also make it hard to forecast what was going to happen. Regulatory overreach might also be a risk to the recovery of many economic sectors in the economies, he added.
“If you believe that good times are here again, it’s probably not a prudent assumption,” Padowitz said.
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