Recession Watch: Signs of the economic slowdown abound
Filed under: Bargains, Food, Simplification, Recession
This post is part of a series about real-life signs we're in a recession. The good news about the recession is that there are bargains to be had for the adventurous shopper. The bad news is that many people are not able to afford them.
Times are tough and the economy is slowing. The National Bureau of Economic Research has not officially pronounced that the U.S. is in a recession -- technically two consecutive quarters of negative Gross Domestic Product Growth. GDP rose 1.9 percent last year and is expected to decline in the first quarter by 0.1%, according to Morgan Stanley.
Yet some economists, including David Wyss of Standard & Poor's, argue that a recession is already in progress. He believes that the economy is half-way through the slowdown, which he expects to be mild as recessions go. "It's still going to hurt," he said in an interview. "Recessions always do."
Indeed, signs of a recession are all around us. People are doing without a full tank of gas. They are watching their pennies at the grocery store. They are learning to do without things that they thought, until recently, they could not do without -- including $10,000 summer camps. Many are watching their homes decrease in value at an alarming rate and foreclosures have hit records.
In WalletPop's Recession Watch series, bloggers documented some of the new trends brought about by the economic slowdown. For example, some young adults are moving in with their grandparents. Businesses of all sizes are merging to save money. Others, such as a karate dojo, are adding quirky new side businesses, such as selling balloons.
Here are some other additional signs of looming recession:
Restaurants:
Getting a reservation at your favorite restaurant has gotten a lot easier lately -- too easy for the liking of owners of dining establishments. Sales are down at chains ranging from Red Lobster to Ruth's Chris Steakhouse. McDonald's and other fast-food chains are the exception -- their profits are soaring. Richard Martin, executive editor of the Nation's Restaurant News, said in an interview that there are now a plethora of promotions under way to lure diners. "It's pretty much an across-the-board situation," Martin said.
Golf:
Planning on hitting the links this summer? You may not have to worry that much about bumping into other golfers because there are fewer of them. According to The New York Times, people are quitting the sport in droves, partly because of economic reasons, such as corporations cutting back on country club memberships. This has occurred despite the popularity of Tiger Woods.
Even with weddings, people are increasingly watching their pennies. They are booking the affairs in off-peak times and reducing the number of guests they invite, according to the National Association of Catering Executives. People also are increasingly bargaining with caterers to keep their costs low without sacrificing the pomp of what should be a once-in-a-lifetime event. For example, don't be surprised if you attend an otherwise lavish wedding this year that does without a Viennese Table, a selection of deserts served at the close of an affair.
Gas Guzzlers:
My colleague Amey Stone recently decided against buying a new mini-van. She's one of probably thousands of Americans that are delaying the purchase of a new car this year. The auto industry, which already is hurting mightily, is trying to convince buyers to jump into a new car with lots of incentives. Growing families will find great deals on the gas-guzzler of their dreams. For instance, buyers are eligible to receive cash back of $3,500 for purchasing a Ford Expedition. Deals also are available from Hummer and Cadillac Escalade for their SUVs.
Penny Pinching:
When times are tough, people look for bargains everywhere, including eBay which recently reported a 12% increase in the value of transactions on its sites. Consumers also aren't shy about haggling at major retailers such as Home Depot and Circuit City, according to The Times. Take this trend one step further: we're seeing an increase in the lifestyle of Freegans, who say they "employ alternative strategies for living based on limited participation in the conventional economy and minimal consumption of resources."
Payday Loans, Cash Advances.
Shares of Cash America, a chain which operates 450 shops that provides pawn and payday loans services, have soared more than 30% this year. Christopher Tomberg recently noted in the Los Angeles Times that "before there were payday lenders, folks hard up for a few bucks had to go to an underground lender who would charge even more outrageous fees and possibly threaten bodily harm." Still, the interest rates are still pretty steep with these services (If you have to do it, here's how).
In the end, people will need to learn that in an economic slowdown, they shouldn't aim to get more with less, they should just get less. Inevitably, they will forget this lesson as soon as the economy rebounds.
Reader Comments (Page 1 of 6)
5-08-2008 @ 8:01AM
TUSHER K SARKAR said...
Yes, we are in recession. In fact, if we can find out the actual reasons for the recent recession, we will be able to recover from this in near future. Going to war for silly reason is the biggest reason for recession. Secondly, lending money without having genuine proof of ID and without having sufficient security. Some big lenders and their dodgy managers are also responsible for this recession. Now, we need to take the following steps to get out of this problems: 1) No more war; 2) No more lending without the proper ID, security and other documents, which must be varified properly and lenders need to implement tighter control on their dodgy managers. No more lending to the illegal immigrants, with fake IDs.
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5-08-2008 @ 10:04AM
BRYANT RIESENBERG said...
GOOD TRY .......BUT THE BOTTOM LINE IS FUEL COST.....THATS 1 THROUGH 10 REASON...THINK ABOUT WHATS INVOLVED WITH FUEL, EVERYTHING!!!!!! EVERYTHING WE TOUCH AND DO HAS OIL IN IT, AND YOU KNOW WHAT....YOU HAVEN'T SEEN "NOTHIN YET" HOLD ON TO YOUR PANTS, WE ARE GOING FOR A "RIDE" OF YOUR LIFE TIME.
5-12-2008 @ 1:45PM
jennifer said...
I can tell u y we r in recession......BUSH!!! HELLO, r u people freakin blind here?
5-08-2008 @ 8:17AM
ddobrjansk said...
This recession is partly based on the skyrocketing price of oil. Who is to blame? The little 20 and 30-something traders who have created the speculative market in oil and are making fat salaries while we all struggle. Remember when th price of gold was fixed and then Nixon took us off the gold standard? Well what we need right now is to fix the price of oil and bring it back down to tollerable levels. We also need a sane domestic energy policy that allows for oil drilling in Alaska with sound environmental consideration.
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5-08-2008 @ 10:14AM
dyarb said...
that about sums it up
5-08-2008 @ 10:41AM
ANDY said...
You're right on it. We need to lower fuel prices soon. Domestic drilling is a must. Stop buying from chevron and mobile will lower prices also. Never by from citgo either.
5-08-2008 @ 8:24AM
DDLE said...
The times are catching up with us. When we were buyer the big SUVs and getting the cheap gas.THE CHICHENS HAVE COME HOME TO ROOST!
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5-08-2008 @ 8:25AM
Sdj said...
The media is not helping at all with constantly reminding consumers that we may be in a recession. They are scaring consumers even more which makes the consumers afraid to spend which makes the economy even weaker. Just like Y2K & Bird Flu Pandemic plus the media had some people stocking up on food & duct tape house for the "anthrax" threats. The media is making the economy even worse!! Too many loans were taken out with only 2 years fixed & then could not refinance. They took a gamble that's their own fault. They knew that their mortgage may go up $500 more after 2 years & may not be able to refinance
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5-08-2008 @ 8:36AM
Dana said...
Part of the recession is caused by easy money available to people who really can't afford to pay it back. It was too easy to buy that big house of your dreams. Now you can't afford to pay the taxes, insurance, heat and all the other expences that come with owning a big home. The finance companies knew you couldn't afford it either but all they cared about was loaning you cheap money. They made their money. Too bad for you.
But who suffers the most? Not big business.
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5-12-2008 @ 9:54PM
right on said...
Greed, ain't as hot as the Movie
5-08-2008 @ 8:40AM
chris said...
Is it the media thats trying to spin we are in a recession? A recession is 2 quarters of economic
no economic growth.The economy still grew.The
unemployment rate is 5 percent.It went down from last month.When was the last time we were in a recession
and the unemployement rate was 5%????. This is more just slow period but not a recesssion.I beleiev this is more driven by the media and democrats to make you feel the sky is falling like always and everything is bad.
If you spin and tell a lie long enough people will believe it.Just this story feeds into it.Sales are down in some restaurants so that means we are in a recession.Thats BS and you know it.Sounds like a Chuck Shumer spin to me.Maybe our bills and taxes are too high thats the problem and people spent more then they could afford
and now are reaping the sorrows of that.
96% of people arent in forclosure.Its just because of the offbalance of high gas and energy prices.Common sense guys.Im sitting here in amazement how the Lib
media is pushing this.Doom and gloom.I run a business
in the housing industry and none of which i do are necessitys but consisdered upgrading and luxury items and things arent all that bad. I heard people are gambling less so we must be in a recession.Spin it however you want we are not in a recession.I even heard some say we are in a depression.Thats complete
nonsense.Put your brains back on and stop being brainwashed for once.Are you doing fine is that the question? odds are you are.i bet you all drive new cars and just baught new computers and plasma tvs.
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5-08-2008 @ 9:55AM
Tracy Coenen said...
*applause*
5-08-2008 @ 11:18AM
Kate said...
Why does everyone always have to make this a political issue? This is money we are talking about. MONEY. Democrats spend it and Republicans spend it, or more to this point, don't spend it.....Our consumer confidence rating is at a 26 year low. These are facts that I am talking about here. I am doing fine this is true, but I have made smart financial decisions, unlike millions of others who are losing everything right now as you sit here and deny there is a problem. Like a horse blindly running forward. The point is that we are trillions of dollars in debt not only to ourselves but now the world. Wake up and smell the IMPENDING RECESSION......
5-08-2008 @ 3:17PM
Dave said...
Recession? We are not in recession. I am a business owner in the industrial supply market. Business is as strong as it has ever been. Supplier such as 3M and Dupont are backordered on almost all of their products and take 4-8 weeks to ship. The press is vested in loosing the war and dragging down the economy just to make President Bush look bad.
Lastly, fuel prices? Fuel prices are hight thanks to the Democrats who are beholden to the far left environmentalist. We have not built a refinery since the 70's and they have blocked drilling for oil. Oil is not beer or alcohol it is essential. There is no alternative fuels that will fill this void and they are very expensive. Wake up you guys
5-09-2008 @ 8:08AM
izzrizz69 said...
I guess it would really depend on what state you live in....
factories closing left and right, my hours cut in half (I work for a doctor) my husband (who is a licensed tradesman) may not have a job in about 6 wks which in turn means no health care(that already costs us 500 a month through his employer so COBRA is out of the question).....
No new computer or plasma tv here.....one car payment and utilities.....I figure out food for the boys and gas later......so maybe the overall picture may not seem too bad....but for a lot of the regular working folks....there are no pennies left to pinch.....
So the resolve?? Move out of state...no...boys are doing too well in school...Hubby moves to another state to find work? yep probably.....
PLEASE...don't mistake this for whining or feeling sorry for myself....I don't at all, we have survived before and will this time....but for some, this sure does feel like much more than a "depression".
5-08-2008 @ 8:50AM
SELINA GARCIA said...
Do any of you who posted comments know what "Spell Check" is?
Reply
5-08-2008 @ 10:04AM
BRYANT RIESENBERG said...
DOES IT HAVE SOMETHING TO DO WITH BEING DIZZY?
5-08-2008 @ 9:20AM
SELINA GARCIA said...
Clinton lied and nobody died, Bush lied and thousands died. I think the USA is in a bad way right now. I don't know what you would like to call it. I remember when the USA was the place that people from other countries wanted to visit and live. The dollar was strong and we had everything going for us.... until BUSH became president. I don't care what anyone says CLINTON was a great president. Who cares if he screwed someone while he was married. Are we all perfect? I think not. Yes he lied.. but he helped the economy, our children were learning in school ad we didn't have to wonder if we were going to buy gas or groceries. We had other countries that were willing and able to step in and help us if the need arises. Now.. we have no one. Other countries laugh at us, our money isn't worth the paper that it is printed on and our children are graduating from high school not knowing how to read. I think that it is sad. This is not what our country was founded on. Everything that this country stands for has been destroyed. I can't do this or I can't do that because we have to worry about who is going to sue me if I say or show something that I believe in. The rich are getting richer and the poor are getting poorer. When we elect the next president (democrat hopefully), they are going to need at least 2 terms to fix all of the damage that BUSH has caused. Until we as a nation stand up and take a stand, the rest of the world is going to step and spit all over us. It is up to all of us, not just the President.
5-08-2008 @ 10:24AM
gemkat65 said...
well said
5-08-2008 @ 9:21AM
Wanda said...
Everyone should take notice that when Our families are back together (the ones you can salvage) and not at war, that will kick start the economy. These are our next generation and they should be here raisint they're children spending they're money as a family normally does in the United States.
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