There is a lot of talk of green shoots, rising GDP, and stabilized unemployment which supposedly signals the end of The Great Recession. It seems to me these stats can be skewed in almost any direction the policy makers want to make the political case they want. Really it all comes down to consumer behavior. Here we sat around and talked about what was going on when the economy was good, and came up with these 5 sure signs the economy is coming back no matter what the economists say.
1) Your friend who really should be employed, is.
Every time I hear the “10% unemployment” number I’m generally surprised that it’s a big deal. Yes it sucks that so many people are out of work, but then I think, “even in good times, doesn’t everyone have ‘that friend’, that one of your ten friends who is chronically unemployed?” They sit around and play Xbox and wait for a management position to come open or a career where they can really apply their degree in Music Therapy? In the new economy, that guy will still be unemployed, but your friends who should have jobs, will. Check in with that eligible person now — when they say things are looking better, they are.
2) People stop making money on negativity.
The morning drive listening to CNBC is always a good gauge of what’s going on in the real world. I’m not talking about the talking heads, I’m talking about the commercials. This morning in my roughly 20 minute commute there were 8 commercials. Of the 8 commercials, 6 were hawking products that would only be advertised in a down economy or fear economy. I had 1 pitch to buy gold, 2 bits on getting caught up with IRS problems, 1 instant business credit pitch, 1 short sale career from home, and 1 loan modification scam. (The other 2 were weight loss; I figure they are topical in any economy, especially on the heels of a New Year.) When the commercials switch to 75% positive to neutral commercials, the neg-heads have found the panic marketing on bad news isn’t paying off. The economy has turned.
3) Someone is “flipping” the house next door and subdivisions are back in vogue.
Even in this real estate market there are probably potential invest/renovate/resell opportunities, but you’ll have a hard time financing them and then lining up buyers. More importantly, this time around won’t be as easy as the last 8 years, so people with more money and good credit than common sense won’t luck into anything. The close twin to this is a bank financing dirt for a new subdivision. For this to happen, someone has to find demand. “Demand” will equal all kinds of things everyone is already talking about—people spending, banks lending, and so forth.
4) Gas back to $3.50 or more per gallon nationwide.
This is a bit conspiracy theory-ish but I really feel like the fix is in on oil. The political pressure will just get too high if we are in a recession and OPEC wants to squeeze us on gas. As long as everyone is hording cash and buying hybrids, demand will stay low. When people move back to land yachts, they feel like spending money on fuel, cost be damned. The price of gas will rise in kind, and “we’re back.”
5) Someone jokes about how many credit cards apps they get in the mail.
This has virtually disappeared. I remember in 2002-2005 I think every 3rd piece of mail was a credit card application. I don’t recall the last one I saw now. Banks are afraid if they give you $5,000 unsecured you’ll run out and pay your mortgage with it and the musical chairs of your financial life will end with them without a seat. Until they believe people are using the cards for big screens and dinners again they won’t go back to spamming your mail box. But when they do, The Great Recession is toast.
Which ones did I miss?