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Economics & Research Blog

Is It Good or Bad: Make Up Your Mind Already!

The bumpy bottom of the recession is still showing.

By Dr. Joe Webb
Published: December 2, 2009

The bumpy bottom of the recession is still showing. If you're a pessimist, you'll point at the downward revision to GDP last week, when it was revised down from +3.5% to +2.8%. Getting out of recessions is usually marked by a breakout quarter of twice that rate that gets revised up. Optimists look at Tuesday's ISM manufacturing report and see increasing new orders, the strongest part of their report. Pessimists look at Tuesday's ISM manufacturing and see employment growth slowing, and prices paid for goods decreasing. The stock markets survived a debt scare from Dubai, which is a good thing, and the stock markets are rising, the optimists would say. Pessimists would point at the rising stocks from international companies that have growing operations overseas, funding them with cheaper borrowing over here, but investing it over there, insulating themselves from the dollar devaluation. Gold has been surging, a classic sign of pessimism and fear of inflation. Optimists would point out that gold is still only half of its inflation-corrected price of almost 30 years ago. Pessimists would claim that Wednesday's payroll report where employment went down by 169,000, as stated by payroll processor ADP, shows that the recession is deepening. Optimists would say that the only real report that matter is Friday's report from the Bureau of Labor Statistics, and that shows that payrolls are still shrinking, but at a slower rate, and that temporary employment is rising. That, they would insist, is always the first sign of a recovering economy.

They're making all of us nuts!

First rule: you'll see it in your clients and your own business, and that's when you should believe it. All of these statistics end up being revised, and can give many false signals.

Second: the marketplace is still changing its demands for print and communications, possibly at a faster rate, because of the economic stress. You need to be adept, and rejustify the use of print, and add new services.

Third: the economy is still dynamic. Some industries weather economic storms better than others. Some take forever to recover. Some regions do better than others because of characteristics unique to those areas.

It's easy to forget that an economy's health is the result of millions upon millions of interactions of buyers and sellers every day.

We know people like to watch them because they're often the only objective view we get of the economy. For that reason, we've introduced the WhatTheyThink ERC Economic Snapshot. It can be found at about halfway down our Economics & Research Center page.

The snapshot includes the latest data for GDP, inflation, ISM indices, unemployment, and leading indicators. In addition to the USA, much of the same data are available for Canada, China, France, Germany, Japan, Mexico, United Kingdom. Some of these data can be hard or inconvenient to get, but it's here and regularly updated.

This is in addition to our Industry Snapshot, which tracks many printing and packaging-related data series. Unique to the snapshot is the presentation of inflation-adjusted data.

We track all of these data series and have much history for all of them. If your company is interested in a purchase of some of these data for an internal project, please contact me.

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Last summer, I gave a speech at the International Graphic Arts Educators Association. The text of the speech and the charts can be accessed here.

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Monday's column will have a complete wrap-up of Friday's employment report. It's two years since we entered the recession, and this report gets more scrutiny every month for signs of change.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink's Economics and Research Center.



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