Is Economic Recovery Up To the Private Sector?

“Once businesses start spending, that really means not only are they going to be buying goods, but they’re going to be hiring Americans,” said Burt White, managing director and chief investment officer at LPL Financial in Boston, according to Reuters. “Those things are really what’s going to be the multiplier that helps to take this recovery and move it into greater expansion mode.”

The prospect of a full-blown American economic recovery has hung in the atmosphere like electricity for months. The markets have pushed back to five-year highs as money moves back into equity and investors, tired of sitting on their hands, satisfy a growing hunger for risk — and growth. But market participants are bound by the economic backdrop against which they have to make investing and business decisions, and the health of that backdrop is by no means clear.

Economic indicators point in no clear direction, although a consensus has built that the worst is over. What lays ahead is uncertain, but optimism has prevailed and growth projections for 2013, while modest, are positive. The Federal Reserve projects 2013 GDP growth between 2.3 and 3.0 percent, a figure that some find overly optimistic. The OECD is projecting U.S. GDP growth of just 2.0 percent for the year.

Meanwhile, unemployment is expected to remain close to 8 percent, far above the Fed’s headline target rate of 6.5 percent…