My Personal Recession Indicator

The Wall Street Journal reported this morning that U.S. top economist Edward Lazear says he doesn't believe the United States economy is in a recession. I'm thrilled to hear someone out there isn't experiencing economic angst, but clearly the chair of the Council of Economic Advisors hasn't gone shopping lately. I have and signs that the U.S. is in a recession are everywhere. Call it the Helaine Olen recession indicator, which is an idiosyncratic but fairly accurate take on life as it is lived by middle-class women. My indicator has not failed me during several economic downturns and, needless to say, almost all signs are currently flashing either yellow or red.

The first warning flare is always the ease of getting time with overpriced hair stylists and other beauty consultants. As recently as last fall, I had to beg for an appointment to get rid of my gray highlights. When I had a similar such need last month, there was barely a client on the premises. And as I fiddled with my BlackBerry while waiting for my foils to be removed, I noticed the stock market had dropped 300 points that day.

Then there's my new best pal, the snooty personal buyer at Saks, the one who informed me in November that people who want to spend under $5,000 on work clothes were not part of her client base. She's now calling to check up on me regularly. Needless to say, I take great pleasure in not returning her calls.

In addition, the retail carnage has been severe in my immediate neighborhood. Small stores are beginning to close, especially ones that sell what could be termed unnecessary stuff. My favorite cheese purveyor is gone, since, after all, who really needs a bloomy rind at $25 a pound when gas is running at close to $4 a gallon?

Kid stuff is also a great leading indicator. And here, I am sad to report, the signs are not good. At my son's co-op nursery school, my husband and I are in charge of Scholastic book orders. We went from distributing two dozen orders in the fall to handing out three lonely tomes this spring. I'm also told a toy store in my former neighborhood, the one that sold the expensive wooden toys that parents love and kids hate, has closed its security gate for the last time. Books and organic playthings are among the easiest things to guilt-trip middle-class parents into buying, so I take all this as an extremely bad economic sign.

But it's not just my hometown. I'm now winning eBay auctions with minimum bids. This almost never happens. Well, it's now happening so often I've put a moratorium on even visiting eBay. And if someone like me decides to remove eBay from her bookmark list -- well, there's no argument. The recession is on.

Comments

[Tator]

Participating in any rescission is voluntary in America, same for poverty. We have the right and option through actively or inactivity choosing our economic position.

[berensma]

That is really a strange statement. Completely off-the-wall, actually, I would say.

[insanityfollows]

When your ass is out on the street at the height of this "voluntary" recession, are you going to wear a shirt that says "The recession-I'm a proud volunteer!" ?

[WIpatriot]

Tatoe-tot shares his wisdom!

[olephart]

Here is a list of recently released Government pablum with comments:

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in March, before seasonal adjustment"

http://www.bls.gov/news.release/cpi.nr0.htm

That is an annual rate of 11% inflation not the 3% reported after the "seasonal adjustment".

"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.6 percent in the first quarter of 2008"

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

The 0.6% increase was based on the aforementioned bogus inflation data. Had the untampered data been used the resulting GDP number would have been -1.2%. Likewise, the prior quarter would also have registered and negative number.


U-3 (official unemployment rate), April 2008 - 5.0%

U-6 Total unemployed, April, 2008 - 9.2%

http://www.bls.gov/news.release/empsit.t12.htm

The underlying unemployment rate is almost twice the headline rate. Thus with inflation and unemployment running at about 10% each the misery index is at 20%.


Oh, did I mention the Birth/Death jobs adjustment for April was 267,000 including 45,000 new construction jobs? This despite a 12 % drop in home building, layoffs increasing by 67% and claims for unemployment rising. The 20,000 job loss would have been a 287,000 job loss without this adjustment.

[ReasonIsMyReligion]

Great post!

My indicator? Jump-starting the 10-year old car every morning instead of buying a new battery.

Yup. I'm in a recession.

[WIpatriot]

Oh yeah? Try squirting ether in the carb to start it EVERY time. But on the other hand, I rarely drive that one.

[miles120]

Sadly, my downturn indicator is the number of good restaurants closing. Places that have a long track record and steady business are now being shuttered. It's another sign that Mom-and-Pop businesses are struggling.

Good post! This country has been stratified ever since someone convinced most of us that supply-side economics would lift all boats. Instead, we created two classes: one that attempts to survive, and another that makes money off that attempt.

[mamacat]

I don't know any businesses that are doing well, other than Big Oil, the war profiteers, and the professional people who work on the political campaigns. Bush and Cheney will do well, as soon as they hit the speech circuit and start getting their $3 million dollar speaking-fee payoffs.

[robbor]

don't forget the corporate run prison system

[dadw5boys]

My recession markers are the price of soups, condiments like mayo or ketsup, and the price of potatoes.

[sd4david]

Definitely some "steals" to be had on e-bay if you bide your time. Bid low, and bid odd amounts like 5.13 will help you win.
I stopped selling there due to their new rules, and too many really low winning bids.
My other secret is to find local sellers who allow free pickup, as postage is a big part of the sales price total, often more than the winning bid.

[dadw5boys]

I like the Ebay sellers who use fake names to drive up the price of the EBAY ITEMs. They reach my max an go over it. I don't raise my max and they end up failing to sell and reposting the item. It takes 3 or 4 times ofen before they surrender and let it go.

[keemia]

That's called "shilling" and eBay has the best technology to catch them and cancel their bids. It's unlikely that's happening that often.