Ever since Gerry Riskin wrote his "Doom and Gloom" post last August, I have been paying much closer attention to the economy that I have before, especially to the factors Gerry highlighted in his post. Regular readers know I have posted frequently on this topic, not only because I think the topic is generally important but also because writing about it makes me think about it.
Anyway, from today’s paper.
1. "The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for April fell deeper into recession territory, to 62.6 from 69.5 in March and below economists’ median expectation of 63.2 in a Reuters poll. The April result is the lowest since March 1982’s 62.0, when the "stagflation" period of low growth and high inflation was an issue for Americans."
2. Gas prices are now over $4.00 per gallon for premium in many locations. Oil-producing nations are refusing to produce more oil. Oil closed over $118 per barrel, almost double the price from a year ago.
3. The stimulus package isn’t going to stimulate much. Most consumers expect to use it to pay higher food and gas price and to reduce debt.
4. It costs so much to fuel up that the American Automobile Association is urging its members to leave their cars at home and take public transportation. (For anyone who doesn’t know, the AAA is the group that likes people to drive cars.)
5. "The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam’s Club, a division of Wal-Mart Stores Inc., called on Wednesday "recent supply and demand trends."
6. Summer is coming. Gas prices will be higher. George Bush is unlikely to agree to a gas tax holiday or release oil from the strategic oil reserve. The Beijing Olympics are coming, so there will be no slowing down in China, at least until then.
Does anyone see an end-game here? I don’t see any short-term change in the economic pressures on our clients. Quite to the contrary.