.comment-link {margin-left:.6em;}
Visit Freedom's Zone Donate To Project Valour

Wednesday, September 12, 2012

Now This Is Dedication

The sad part about economic forecasting is that you can almost always ignore sentiment and look at fundamentals. My back is not improving, but to answer the question about whether I believe we are in a recession - YES.

Inventories are moving in the wrong direction:
 
This is most definitely a troublesome sign. 

In the grocery stores, it is evident that customers are acutely sensitive to price changes and are shifting their consumption patterns rapidly as a result. 

There just isn't the money in checking accounts to cover all the expected Bling-season expenditures, so a lot of consumers will be ratcheting back:
Last year from just before tax due date to the end of August we got this big build in deposits which fueled Bling spending. This year, we got very little. From 4/13/11 to 8/31/11, other deposits rose from 6,315 to 6,694. This year, from 4/11/12 to 8/29/11, other deposits rose only from 7,159 to 7,214. People are just running out of money this year. This includes business deposits also. 

Finally, we are going into this period with high fuel prices and high food prices, which really does not inspire confidence for households or businesses on a tight budget. 

We are in a consumer-led very mild recession, but the Fed is going to help us out and keep prices HIGH. It's so kind and stimulative of them. When the problem is money circulation for  the 65%, raising prices for the 65% is not the cure!

Bling last year was helped by a drop in gas prices. Bling this year looks pretty slim. 

Note: Census' updated 2011 report contains some pretty amazing figures re poverty. Median incomes for both men and women declined 2.5% from the previous year. Household incomes declined less at 1.5%, but that is because people are consolidating households due to inability to pay the rent. Median incomes for both men and women without a disability declined 2.6% over the year. Start on internal page 7. Median household income was 8.1% lower than in 2007.

Comments:
I was told yesterday that one of the local hospitals gave an across the board 10% pay cut to employees. This was done to try and prevent a layoff. My customer had to put her internet connection on hold as a result. People tend to keep their cell phones if nothing else (as she did). A lot of other services seem to be cut back as people are cash strapped.
 
Teri - it's better than a layoff, but it's not exactly a big "Happy Holidays", is it?
 
Yep, we've been through two such wage cut backs (10% each) over the past two years. Fortunately I've managed to pick up other gigs consulting and such to help make up the difference. Lean holidays coming though...

Feel better MOM, I don't often comment but check for posts daily, thanks for the great (albeit sad) feed.

 
Post a Comment

Links to this post:

Create a Link



<< Home

This page is powered by Blogger. Isn't yours?