Things happened this week that indicate things have turned the corner.
The Commerce department reports we spent more this past summer, more than the economists and politicians expected. We know life goes on. Despite retailers unjustly raising prices, we still had to buy food, clothes, and gas for the car. The kids needed new baseball cleats, swim suits. The house still needed a new coat of paint. We couldn’t just stay home all summer. A shortened vacation was better than no vacation at all.
Analysts warn this spending surge may be the result of Americans dipping into their savings (Considering the banks’ interest rates, perhaps people are saying why bother?) Or maybe we’re re-prioritizing our spending. If the essentials cost more, maybe we’re more particular about the extras we buy.
Watch. Some of those gouging prices are going to disappear. We’ll see mark-downs in items and services Americans have simply decided are outlandishly overpriced.
Unemployment claims are down a bit. Job numbers have been going up and down all year, but there’s been more of a downward trend lately. Maybe because business overall is discovering sitting on its hands—and its cash—waiting for things to get better is bad business. As Washington State Chief Economist Arun Raha told the luncheon audience at this week’s Regional Open-for-Business Expo in the Tri-Cities, entrepreneurs through history come up with the great idea not in swell times, but in hard times.
Comparing Washington’s economy to other states, Dr.Raha dryly gave the crowd the rallying cry, “We suck less.”
Watch. You’ll see if not a spurt in job growth, a genuine trend upwards in the first half of next year, especially construction, as businesses get off the dime and remember how they got into business in the first place. You gotta spend money to make money. Customers don’t come to you. You must go to your customers.
The other big, BIG development of the week, the sigh of relief heard around the world. Europe inked a deal on how to manage Greece’s debt. That should help settle the financial indigestion of Germany, France and other countries that do a lot of business with the U.S.
Finally this week, JP Morgan Chase said it won’t impose fees on its customers who use debit cards. Wells Fargo also canceled debit fees in
test markets. Good business strategy.
Watch. Bank of America will retract its proposed debit card fees before they’re scheduled to go into effect next year. I would expect an announcement from B of A before the holiday shopping season begins in a few weeks.