Economic Data Supports Swoosh-Shaped Recovery

June 26, 2009 11:52 AM EDT

The Nike (NYSE: NKE) "swoosh" is one of the most widely recognized logos in the world, but now the "swoosh" is breaking into economics to represent the type of recovery we could see.

The swoosh-shaped recovery: a vertical plunge followed by a slow swoop up. Makes sense!

On its earnings conference call yesterday, Nike (NYSE: NKE) CEO Mark Parker commented on the swoosh shaped recovery: Parker said, "As for the larger economy, there are many ways to describe the recovery under way. Some experts suggested a V-shape recovery characterized by a quick drop in rebound, which now seems unlikely. Others predicted a more prolonged U-shaped recovery. I prefer the way the business media are describing a third option, a quick drop followed by measured yet consistent recovery. They called it the swoosh recovery because it mimics the shape of our logo. I'm going to go with that one."

Today's economic data may further support this swoosh-shaped recovery theory. Data today showed that personal income rose 1.4%, the most in a year, while consumer purchases rose just 0.3%. The economic stimulus plan likely contributed to the rise in income, but despite this uptick in income consumers were still tight with their wallets. This suggests what many already know - because of worries about the economy and jobs, consumers are saving at a much higher rate. Eventually, consumer comfort levels will return leading to the upward swoosh in the recovery.

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