Is the Economy Improving?
Pardon the interruption to your warm glow but don’t be misled by what you have heard and read.
Things are not always as the popular media would have us believe, either positive or negative. No surprise there.
I don’t plan on digging deep into the present economic scenario today. Most people aren’t paying attention anyway, now that we have a new flu pandemic to worry about.
But I thought you might be interested in a couple of helpful economic charts from the Bureau of Economic Analysis.
Gross Domestic Product is …. Gross
Did I say “growth”? A 6.1% first quarter decline in GDP is stunning. It makes 2008 look like a fantastic year in comparison.
Together, the 4th quarter of 2008 and the first quarter of 2009 provided the worst six month GDP performance in over 60 years. If you don’t believe me, check out this chart comparing the present recession to its historical cousins.
Look at the bright side. We are making history – something to tell your grandchildren while they are slaving away to pay the bills for current government spending.
Consumer Spending and Personal Incomes – Out of Sync?
Speaking of spending, consumers are starting to feel good about going into stores again. The problem is that the consumer spending part is not being matched by the personal income part, as this BEA chart shows:
I haven’t completely thought through the significance of the data, but it appears that disposable personal income is still declining while consumer spending is increasing. If this is true, it must mean what? Credit?
The hard truth is that we are not out of the economic woods yet. Indeed, if this flu pandemic hangs around a while, our visit into the forest may be extended for a while.
Maybe you should sell your airline stock and use the cash to buy food, surgical masks, and Tamiflu.