Do YOU Think the Recession Is Over?

Recession or Recovery

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in General

How is the economy in your corner of the world?

We’re hearing and reading much these days about the improving economy—the stock market has climbed over 50% since it’s low point in March of 2009, banks are becoming profitable and it looks as if the worst is over for housing and on the job front.

At least that’s what statistics are indicating, and while statistics are useful, they aren’t exactly real life. So the Big Question: Is this a statistical recovery or a real one?

A curious, but hardly surprising article appeared on Yahoo Finance this week For many, recovery means lower expectations (AP, June 6, 2010) taking a close look at what the recovery means to ordinary people. The overall tone of the article is most definitely slanted to the negative, highlighting continued employment problems forcing people to lower their expectations for the future. Is there any truth to this assertion in light of statistical data pointing toward recovery? Perhaps.

Mark Twain wrote that there are three kinds of lies: lies, damn lies and statistics.

With that in mind, let’s play a little game. Let’s pretend that statistics are meaningless, and seek out some anecdotal evidence—from YOU! What’s your take on the recovery?

I’ll get the discussion going by honing in on eight areas of the economy that were either acutely affected by the recession, or that represent viable markers confirming that the recovery has taken hold.

Housing. The Great Recession began with real estate, and perhaps no sector was harder hit. Housing sales, new construction, mortgage lending, real estate related services all fell hard. But where are we at today?

  • How bad has the housing market in your area fared since 2006?
  • Has there been an increase in new construction in your area in the past few months?
  • Were you trying to sell your home during the recession? How did that go?
  • Does it seem any easier to sell a house in the past six months or so?
  • Are you planning to buy a house in the next 12 months? Do you know others who are?

Jobs. In the early days of the downturn, employment seemed to resist the economic tide. But when jobs did finally begin following the economy down, the unemployment rate moved up with frightening speed. Opportunities to advance, either through promotions or through new positions at other companies came to a standstill. And now that recovery is being reported, the unemployment rate remains in the high nine percent range, or right about where it was six months ago.

  • How is your job going now?
  • Are you facing the prospect of a layoff, or does it look like conditions have stabilized?
  • Are the unemployed in your area finding jobs? Are those jobs comparable in compensation to what they had previously?
  • Have you been promoted in the past year, or do you expect to in the next few months? Do you know others who have?

Small businesses. One of the surest signs of economic recovery is a surge in new small businesses. As the recession began taking hold, storefronts and offices closed up faster than jobs disappeared. Where I live, in suburban Atlanta, shopping centers and office buildings with vacancy rates in excess of 50% are hardly unusual, and the closures are continuing.

  • Are you getting a surge of new businesses opening in your area?
  • Were you forced to close your business since the recession began?
  • Are you opening a new business right now? Or do you know others who are?
  • If you were to open a new business now, what would it be?

Cars. Car sales seemed to do somewhat better than housing in the depth of the downturn, but not so much better that bailouts and a bouncing incentive credit program didn’t have to be put in place to avoid an alleged collapse. But if there is a visible barometer of economic improvement, it would be car sales. When people feel better about the economy and their own prospects in it, thoughts turn to new cars. And sales are up, albeit from very low levels.

  • Have you bought a new vehicle in the past six months? How many people do you know who have?
  • Did you take advantage of the new car credit? Would you have purchased the car if the credit wasn’t available?
  • Are you planning on buying a new vehicle in the next six months? How many people do you know who expect to do the same?
  • Have you sworn off buying new cars in favor of buying used?

Vacations and travel. Prior to 2007 the travel industry was seen as one of the economy’s bright spots. But the recession in combination with high fuel prices toppled that notion. Are people suddenly traveling more, or will this be a trailing indicator?

  • Are you traveling more or less in 2010 than you have in the past few years?
  • Are you moving ahead with vacation plans, or are you holding back to see what happens?
  • Are people in your social orbit traveling more in 2010 than they have in the past few years?
  • Have you seen evidence that business travel is on the upswing?

Stock Market. The market collapse that dropped the Dow Jones Industrial Average from 14,000-plus down to the 6500 level in a space of less than 18 months is now history, as may be the 12 month recovery that brought it back up to the 10,000 level. Where it goes from here is anyone’s guess, but the stock market is a widely regarded leading indicator of the future direction of the economy. From a statistical standpoint, this indicator is almost irrefutably flashing recovery.

  • Have your stocks largely recovered from the 2007-09 plunge?
  • Did you sit out either the plunge, or the subsequent recovery?
  • Do you know anyone who’s ahead on the market since the beginning of 2007?
  • Have you become more aggressive with your investments in the past few months? Or do you plan to in the future?
  • Do you think the advance that began in March of 2009 has a long way to go, or do you think the market is huffing and puffing already?

Credit. Beginning with sub-prime mortgages, then crawling its way through virtually the entire credit granting universe, a credit freeze brought lending to a virtual standstill for at least a year. Compared to the zero down financing for houses and cars and mailboxes full of credit card pre-approvals world of 2006, how do things look for credit now?

  • Did you have any credit lines or home equity lines of credit (HELOCs) closed or reduced during the height of the credit crisis?
  • Have you obtained new credit in the past 12 months? Was it difficult to get?
  • Do you think we’ll ever get back to the easy credit of 2006? Do you even think we should?

Future expectations. Of course, this isn’t a tangible economic factor, but how we view future financial mobility says a lot about our view of economic conditions. Take a stab at these”¦

  • Are you less hesitant to spend money now than you were a year or two ago?
  • Are you financially better off now than you were a year ago?
  • Do you expect to be better off one year from now than you are right now?
  • How is your financial situation now compared to 2006?
  • Five years from now, do you expect your financial situation to be better, worse, or about the same as it is now?

Pick any one topic or any group of topics, and weigh in with your opinion. Based on what you’re seeing and experiencing in your area or business, is the economy improving, declining or bumping on the bottom?

Kevin At Out of Your RutThis post is from FiscalGeek staff writer: Kevin Mercadante. I’m very excited to have him contributing to the site. You can find out more about him at his own blog OutOfYourRut.com.

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