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So... let me get this straight. You're claiming that spending is going to increase while credit has been reduced and incomes are flat. That's your premise?
Yes.
There is a LOT of pent up demand. People have cut back their spending for well over a year now - and in many cases have paid down portions of their debt. The main thing holding back spending is not that people don't have money (savings rates are up after all) - it's that people have been too frightened to spend. That fear will pass as the layoffs end (early next year).
Often after a recession there is a resurgence in spending - and that will likely be the case this time too.
"While the recession has put the brakes on recreational spending, it has also caused many consumers to put off major purchases — such as a new car or washing machine — until the economy rebounds.
Those postponed purchases represent a phenomenon known as "pent-up demand," which is often the key to emerging from an economic downturn."
This article is older, but essentially tells the same tale:
"Last year's credit crisis hit the economy with a surprising jolt, and most economists expect the recession to drag on until at least the end of 2009, with only a meager recovery after that.
But just as economists were caught flat-footed by the sharpness of the downturn, history says they could be surprised by the speed and strength of the recovery -- once the economy shows signs of turning around."
i hate to burst the bubble here, but the problem isn't just consumer spending. we are simultaneously told that china is going to lead us out of the worldwide recession and then told that united states consumer spending will lead us out of the recession.
we can't fix a debt problem by piling on more debt. this is a snowball that has just started since commercial businesses are just starting to fail now. that would have been the driver of the new job growth, NOT THE GOVERNMENT. where is all of this job growth supposed to come from?
the money we borrowed has been used to prop up some international banks and bankers and very little has trickled down into creating sustainable jobs.
i hate to burst the bubble here, but the problem isn't just consumer spending. we are simultaneously told that china is going to lead us out of the worldwide recession and then told that united states consumer spending will lead us out of the recession.
we can't fix a debt problem by piling on more debt. this is a snowball that has just started since commercial businesses are just starting to fail now. that would have been the driver of the new job growth, NOT THE GOVERNMENT. where is all of this job growth supposed to come from?
the money we borrowed has been used to prop up some international banks and bankers and very little has trickled down into creating sustainable jobs.
I've already posted - what? - 4 different business surveys showing that private business is ALREADY planning on picking up their hiring next year - so whether you are confused or not - GROWTH IS COMING. The fact that you don't understand how merely means you need to expand your education.
Businesses have said they are going to start rehiring, product inventory levels are getting very low - meaning the production must restart in order to restock. This means increases in hours for existing workers and (in some cases) additional hiring.
All the government is doing is "priming the pump" - once the economic engine starts it tends to feed itself (as the economy ALWAYS does).
Affluent customers already starting to pick up their spending (probably because they've seen their financial positions improve as the stock market rose):
"Oct 19, 2009 10:11 ET
Affluent Consumers Come Roaring Back -- at Least Some of Them -- As Consumer Spending on Luxury Rises Sharply in Third Quarter, According to Latest Survey From Unity Marketing
Affluent Consumers Release Pent-Up Demand for Luxury in Third Quarter 2009 as Those With Highest Levels of Income Pick Up Their Spending."
Affluent Consumers Come Roaring Back -- at Least Some of Them -- As Consumer Spending on Luxury Rises Sharply in Third Quarter, According to Latest Survey From Unity Marketing (http://www.marketwire.com/press-release/Unity-Marketing-1061518.html - broken link)
The pace of layoffs look like they are continuing to drop - and I stand by my prediction that they will be done (and hiring returning) by the spring.
Pace of Layoffs, Planned Job Cuts Both Show Decline - Economy * US * News * Story - CNBC.com (http://www.cnbc.com/id/33616813 - broken link)
Ken
LOL! Well don't place any bets on it. There is simply no basis for such a prediction at this point. There is nothing taking place that could trigger such a recovery. The exact opposite is true. Threat of more taxes on virtually everything, threat of the so-called "health care" bill passing, which will cost business millions. Threat of "Cap and Trade", which will drive up energy prices, and everything associated with it.
This is not the kind government intervention in the economy that causes growth in the private sector. And that is what is required for jobs to come back.
LOL! Well don't place any bets on it. There is simply no basis for such a prediction at this point. There is nothing taking place that could trigger such a recovery. The exact opposite is true. Threat of more taxes on virtually everything, threat of the so-called "health care" bill passing, which will cost business millions. Threat of "Cap and Trade", which will drive up energy prices, and everything associated with it.
This is not the kind government intervention in the economy that causes growth in the private sector. And that is what is required for jobs to come back.
And yet the stock market has shot skyward, and month by month jobs losses are dropping, and manufacturing is picking up and retail sales are improving...
Sounds like government stimulus programs in overseas countries is not only boosting job creation in their own countries but also here in the US:
NEW YORK - The US trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged...
...More than $2 trillion in government stimulus programs are reviving demand from Asia to Europe, ensuring that US factories benefit from growing sales overseas as the dollar weakens. Production gains and the need to replenish depleted inventories mean imports will probably also grow, preventing the deficit from narrowing further."
And in return we are starting pick up our orders for Chinese goods:
European Union and U.S. buyers thronged the show, a barometer of foreign demand for local products, from Oct. 15, boosting visitor numbers by 14 percent, he said.
“There’s been a notable rebound in the number of buyers and the amount of orders especially from Europe and the U.S.,” Chen said at a Guangzhou press conference today. “That’s laying a sound foundation for next year’s export recovery.”
The recovery - driven by government stimulus programs across the globe is sparking a global economic recovery. It's happening here, it's happening in Asia, and it's happening in Europe.
For something that "doesn't work" government stimulus sure seems to be working.
LOL! Well don't place any bets on it. There is simply no basis for such a prediction at this point. There is nothing taking place that could trigger such a recovery. The exact opposite is true. Threat of more taxes on virtually everything, threat of the so-called "health care" bill passing, which will cost business millions. Threat of "Cap and Trade", which will drive up energy prices, and everything associated with it.
This is not the kind government intervention in the economy that causes growth in the private sector. And that is what is required for jobs to come back.
GOOD NEWS a local business here that laid off the last of thier employees last month has announced no layoffs this month! happy days are here again
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