Is the economy improving? Views from everyday folks
A poll is one thing, but what are your thoughts?
On a recent Friday night, we had some good frugal fun. Kris and I got together with a group of my old high school friends to go bowling and eat pizza. It was just like the good ol’ days -- but with a bunch of grade-school children added to the mix.
Over pepperoni pizza and root beer, the conversation turned to the economy. I asked my brother Jeff how the family box factory is doing. “To be honest,” Jeff said, “we’re about to finish our best month since October 2008. And if you look at actual daily sales, this will be our best month since February 2008. It’s our best month in two years.”
“That’s great,” I said. “Maybe this means the economy has finally turned a corner.”
We’ve believed for years that sales at Custom Box Service are a fairly accurate barometer of the economy’s overall health; our sales always reflect where the country’s economy will be six months down the road. Sales at the box factory started to erode in autumn 2007, for example, before falling off a cliff in March 2008. Things bottomed out last February, with our lowest sales since the company incorporated in 1995. So, if the company’s sales are finally improving, we take that as a sign that the U.S. economy is on the road to recovery.
“How’s your business been doing?” Jeff asked our friend Ron. Ron’s family owns a wholesale nursery, and their sales have been down too.
“Rotten,” Ron said. “Last year was awful.”
“I think the economy’s been bad all over,” Kris said. “I just spent a week in eastern Oregon for work. It’s been awhile since I was in Pendleton, and I was shocked at how many empty storefronts there were. A lot of places have gone out of business.”
“I keep waiting for things to turn around,” Ron said. “Just today we got a huge order, which is a relief. It’s an order we expected last fall. I’m just glad it finally came through.”
“Yeah,” said Jeff. “I think a lot of people put off ordering because they were letting their inventories run low. But that just made things worse. Our sales were down so much last year that we couldn’t fund employee pensions, and Christmas bonuses were a lot smaller than usual. At least we didn’t have to lay anyone off.”
“But January was a good month,” I said. “That’s a good sign, right?”
“Yeah,” Jeff said. “And another good sign is that some of our suppliers are raising prices. In fact, we think some of them will be going up 15%!” (Fifteen percent is a huge price increase for paper.) “So maybe that means things are turning around. Or maybe it’s just a sign that there’s inflation in the future that’ll make things worse. I guess if you were optimistic, you could say these are signs of an improving economy. It’s definitely a step in the right direction, but it could just be a brief peak on the roller coaster of the Great Recession.”
I, for one, am an optimist (not just about the economy, but all things). I think things have finally turned a corner. Unemployment is still lagging behind (as it always does and always will), but from my perspective, the economy seems to have hit bottom and is finally beginning to show some signs of improvement.
When I got home from bowling that night, I dug out the numbers for the most recent poll from Get Rich Slowly and MoneyRates. Since mid-January, visitors to both sites have been answering the question, “Where do you think the economy sits right now?” Here are the results based on more than 1,200 responses:
- 2% -- Strong growth. Full steam ahead!
- 15% -- On solid ground and growing some, thank goodness.
- 43% -- Stagnant. Not growing, but at least not getting worse.
- 20% -- Not horrible, but looks like it’s going downhill.
- 21% -- Free falling. I’m bracing for the worst.
In general, GRS and MoneyRates readers aren’t yet optimistic. Many of you think things are stagnant still, and nearly as many think conditions are getting worse. Fewer than one in five believe that the economy is actually improving.
A poll is one thing, but I’d like to hear your actual thoughts. How do you feel about the current economy? Do you think we’ve finally hit bottom? Or are things still getting worse? How has the recession affected you and your family? What do you think it’ll take for things to get better?
Related reading at Get Rich Slowly:
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