Call me a numb nuts, but I just don’t see it. The unemployment rate is still low, everywhere I go i see “help wanted” signs, the newspaper is chock full of ads for work in all different vocations. Nobody I know (and I know a hellofalot of people) has been downsized or layed off, my company has so much work on it’s hands it’s insane, and none of my clients have downsized or had layoffs. In fact, many of them are expanding and hiring more people. Everyone I have contact with is working like beavers, and getting paid well, even the blue collars. Hell, my 16 year old is making exactly $10 an hour to work at the mall! But all I hear on t.v. is about the "bad economy’. I just don’t see it here.
Now I realize that somewhere, someone has gotten layed off, but that happens even in the best economies. Also, the stock market is down, but that can happen in a good economy too. Is the media pushing this “bad economy” myth because a conservative Republican is in the White House? Show me the bad economy.
Anyway, unemployment’s rising from 4.5 percent last month to 4.9 percent. Layoffs are up. Industrial production has fallen for the last 11 months, the longest since 1960. Ford just trimmed 100,000 cars it expected to build this quarter (a decline from 920,000 to 820,000 means less hours for workers, which means less money in their wallets, which means less shopping).
The stock market’s tanked, particularly in the technology sectors; this creates a ripple effect through the rest of the economy.
Now, with the WTC/DC attack, economic analysts are predicting that the economy will contract by 1 percent this year. In general, two quarters of contraction signals a recession.
Also, remember rising energy prices? That sudden spike causes a ripple effect as well. It costs manufacturers more to make their products and more to ship their products. Airlines suddenly see a large part of their profits heading for the Middle East.
Be glad for your fortune, but recognize that we’re on a definite downward course for awhile.
One bright spot: the experts are claiming that events in the near-future may throw us into a recession. Why is that good news? They said the same thing about the Gulf War, and that prediction turned out to be dead wrong. Rebuilding the Pentagon and (perhaps) the WTC will cause a positive blip on economic screens, because it puts money into the pockets of construction workers and businesses.
I would add that the only thing keeping the economy going this year is a rapid increase in housing prices, which means that people refinancing have more money to spend. For many people, the increase in their homes’ value has offset the losses from the stock market.
4.9% unemployment is still lower than it was during much of Clinton’s administration. DJIA is, I believe, still above 10,000 – again, well above any level pre-1999. While things are certainly not as rosy as they were this time last year (and certainly not as rosy as they were this time last week), I agree with Numb Nuts: I’m seeing a slow-down, but I’m not seeing a collapse.
Of course, I’m still waiting for someone to “show me the recession” of 1992. I lived through that one, and was never aware of it. And, speaking of indicators, according to some growth statistics that “recession” actually ended BEFORE it began!
I agree with both these statements. Especially the 1981 thing. I remember 300 adults lining up to apply for 1 part time job at the Dairy Queen because their unemployment had run out. It was bad.
But this…? This is nothing. I simply can’t see anything that even comes close.
First, I agree with you pkbites. By historical standards, you would think we would wait for two quarters of GDP decline before busting out the “r” word. I think the current situation is getting a bunch of press because a) the markets have fallen so far from their bubble peak (and are still overpriced from a P/E point of view), b) beause the high-profile tech companies who dominated the news during their run-up have obviously let a lot of people go, c) because manufacturers are really being hit (as pesch indicates), which traditionally precedes the rest of the economy, and d) because of the current strange dichotomy between high consumer confidence and panicky, investment-shy businesses. But there’s no arguing that unemployment is historically low, inflation is under control, housing and retail are ok, and the markets (at least until Monday) are strong. Personally, I think that most of the slowdown is comprised of bad business plans (pet food over the internet!) which failed upon a collective return to our senses. Every recession should be this tough!
The “recession” is nothing yet. So far we still have positive growth, though near zero. You must have negative growth (shrinkage would be a better term) to have a recession. But things are bad. People in employment tell me this is the worst employment climate since the middle 80s, which was the worst since the Great Depression. Literally hundreds of résumés are arriving for every position, almost without regard for pay. Midway Airlines has gone belly-up (continuing the theme of airlines calling it quits).
4.9% unemployment isn’t terrible, but it’s the trend rather than the raw numbers that give one pause. Half a percent in a month is a huge jump. During Clinton’s term, the trend was downward, so 4.9% was an indication of health, not of malaise.
If you want to know how the economy is, look for a job. There aren’t any to be had. In a climate like that, people unemployed are spending only for staples. People who are employed are concentrating on paying down debts rather than buying. Retail thus takes a hit, along with manufacturing. The balance of payments is better, but only because people aren’t buying imported items, either.
Hey, i’m still looking for the great abundance of jobs to be had with the tremendous cash and benefits that were muchly touted 2 years ago! Here in Oklahoma City the newspaper classifieds looks about the same as it has for the last 15 years…there is a local website with free classifieds, and it has only about 1200 jobs on it. Were there EVER that many great jobs to be had for the asking???
there have been great migrations to find jobs elsewhere since the industrial revolution. The okies move to california to pick oranges, the mountain people moved to detroit to make cars. If you live in a place with limited opportunity, you will tend to move where there are more opportunities. It’s why there are so many russians, irish, english, and germans among us.
Maybe this is a regional thing. As other posters have indicated, I see a lot of help wanted signs around. Classified sections are as full as ever.
People worried about the job market should see where the opportunities are. Just to pick one example, go to nursing school or med tech. I have yet to see a job market anywhere, from small town to large city, that wasn’t short of nursing-type care.
As far as spending goes, I’m keeping up my end. I just bought a house (my first), and three entire rooms worth of furniture. I have to finish the basement, as well. I look around me and there are lots more doing the same, at least around here (and as I admitted, this may be regional). And if it takes a “recession” to encourage people to pay down debts, well, at least something good is coming from it.
>And if it takes a “recession” to encourage people to pay down debts, well, at least something good is coming from it.
That’s true. Debt repayment is generally a good thing unless you’re a money lender living on the interest. Recessions have a lot of bad aspects, though–suicide goes up, crime goes up, murder, drug abuse, drinking go up. Domestic violence increases, along with homelessness. The main reason we’ve seen a reduction in these things in recent years is that the economy has been good and getting better. I don’t know why teen pregnancy and abortion have been going down, but my gut instinct is that we’ll see both skyrocket now. Hard times don’t really make us better people. I don’t know where that myth got started.
I think you’re absolutely right about regions and sectors of the economy. The west coast has seen a lot of tech softness and here in the midwest mfg is continuing to slow, no doubt. My MBA program (UMich), for example, is facing the weakest recruiting schedule in years because of the softness in mfg and thus consulting - the Big Five consultants aren’t even hiring. But there are still plenty of companies offering great jobs in other sectors, and my wife is an RN in a Master’s of Public Health program with lots of opportunity in both nursing and health care. As far as the last few months, you have to ask yourself which headline sells more papers -
“Economy grows, but slower”
or
“AMERICA IN RECESSION: HOW TO HANDLE THE COMING CRUNCH” ?
Now, of course, we get to see the effect to a populace in shock AND a wallop of gov’t deficit spending…
Yep, it is regional. I live in the SF Bay Area, and I must say things are tight right now:
Help wanted has become a thin section of the paper. Jobs are pretty hard to find.
Real estate prices have dropped in some areas by 20-40% (and, yes, I know they were in the stratosphere to begin with, but tell that to the poor slob who bought at the top).
The office vacancy rate has jumped to the highest level since the early 90’s.
I personally know at least 5 people who have been laid off. At least one has been out of work for 4 months.
Yes, things have been worse, a lot worse, but they’re not very pretty right now.
[sub]NUMB NUTS[/sub]