how well is your local economy doing?

[photoguy]

For all the doom and gloom going around in the news, I don't see it in my local economy (San Jose). I walk my dog at least twice a day and I always see packed restaurants and large lines at starbucks etc. Is this just bias on my part or are other people seeing the same thing?

 

[dex]

I always see packed restaurants and large lines at starbucks etc.

Are you sure about what you are seeing?

U.S. restaurants starved for business - Los Angeles Times

With consumers and businesses keeping a lid on expenses, more and more small and mid-size restaurants are throwing in their dish towels and closing up shop.
Southern California lost nearly a thousand more restaurants than it gained during the 12 months that ended in March, representing a net 2% drop that was twice the national average, according to the New York research firm NPD Group.

Nearly all the closings were among independently owned restaurants: small, family businesses that just couldn't hold on as customers held back. Earlier in the year restaurants reported modest increases in business, but the jumps in sales were too little too late for many.

 

[W2R]

I don't really see any signs of a slowdown here, either, other than the housing bust. But then, the bid on my landscaping work seemed surprisingly low. Maybe that is related.

No slowdown in the restaurants that we can detect from the point of view of a customer. Restaurants don't seem to be having any problem getting seafood any more, even oysters. The mall by Frank is jammed as always. Plenty of new cars being driven around.

At Salvation Army and Good Will (where we have been spending time to donate), the goods seem very fine and cheap and the model of cars customers drive seem nicer than I recall. If anything, I see fewer homeless on the streets then in 2006, for example. But that might just mean that they are getting picked up more frequently by law enforcement.

Still, I suspect that the employed, middle class, and wealthy are doing better than ever and buying more but the unemployed are in terrible shape. But I don't KNOW this first hand.

 

[ziggy29]

Just keep in mind that with small businesses on tight margins, it doesn't take much. a 5-10% reduction in business, often too small to notice, can wipe out much of the profit.

That said, our regional economy is better than most. The Austin area (the nearest metro) isn't without some challenges but it, like most of the economies in Texas, are doing better than much of the country. Our local area doesn't have a lot of the industrial/technical private sector jobs that have borne the brunt of job losses. And we have a lot of retirees for whom job loss isn't a direct issue. I suspect that is putting a floor on any drop.

 

[73ss454]

I also don't get it. I'm in eastern central florida and they say Florida is suffering yet it's hard to get a seat in a restaurant.

I'm working PT selling boats and the last 2 years were the best years my dealer has had in 10 years.

Go figure!

 

[ziggy29]

I also don't get it. I'm in eastern central florida and they say Florida is suffering yet it's hard to get a seat in a restaurant.

I'm working PT selling boats and the last 2 years were the best years my dealer has had in 10 years.

Go figure!

I really think we are entering a "bifurcated" economy. Those of significant and secure means are *mostly* doing fine and not cutting back, but those feeling vulnerable to (or a victim of) job losses and pay cuts are feeling an entirely different reality to a large extent. IMO this is related to the erosion of the middle class we've seen for a couple decades now, but really accelerated since the dotcom crash of 2000-01.

 

[REWahoo]

I'm working PT selling boats and the last 2 years were the best years my dealer has had in 10 years.

Go figure!

I'm sure it had nothing to do with the sales force...

 

[dex]

There is another way at looking at the economic situation instead of 10% unemployment (+ new people entering the workforce not getting a job); that is the 90% of people that are working. Also, the unemployment rate among people with college degrees is less than half the 10% general unemployment rate, so again, a large part of those that make up the unemployment rate are at the low end of the pay scale - not a loss to the restaurants mentioned in the OP.

 

[meierlde]

Also, the unemployment rate among people with college degrees is less than half the 10% general unemployment rate, so again, a large part of those that make up the unemployment rate are at the low end of the pay scale - not a loss to the restaurants mentioned in the OP.

If you look at the bls statistics on unemployment by education its like 15% for hs dropouts about 9.8 for hs grads and 5.4 for 4 year college grads, and lower for advanced degrees.

 

[Ronnieboy]

For all the doom and gloom going around in the news, I don't see it in my local economy (San Jose). I walk my dog at least twice a day and I always see packed restaurants and large lines at starbucks etc. Is this just bias on my part or are other people seeing the same thing?

I would say about a year ago when the national media said we were in the recession, it seems that in my area nothing had changed. But in the past 12 months, some people I know had lost their jobs, others spouse had been laid off, resturants have been less busy. It seems now we are seeing the worst of it.
We are usally behind the rest of the nation anyway.

 

[nanannjen]

I really think we are entering a "bifurcated" economy. Those of significant and secure means are *mostly* doing fine and not cutting back, but those feeling vulnerable to (or a victim of) job losses and pay cuts are feeling an entirely different reality to a large extent. IMO this is related to the erosion of the middle class we've seen for a couple decades now, but really accelerated since the dotcom crash of 2000-01.

I agree with this. We have our house on the market (SoCal) for 1.35 mil. My parents (10 miles away) are less than half that price. Ours has been shown about 25 times - theirs has been shown maybe 5 times. I think that those who can afford this market are still doing fine - it's the middle class who's having a tough time.

In either case, the malls are packed and restaurants seem busy....except for the ones who went out of business already..... No idea how many of those mall patrons are buying stuff, either.

 

[FIREd]

More and more, I realize that I am a poor judge of the state of the economy as a whole. I read a lot of sad stories in the media about people losing their jobs, their homes, or their savings, but in real life I know very few such people. All of our friends are employed and seem to be doing as well as ever (most are college educated), though many also seem to be fed up with their current job and ready to jump ship at the first opportunity. Some family members do face some money issues but these issues have been years in the making and unrelated to the current state of the economy. I only know of one family member whose bad decisions were made dramatically worse by the recession: he left a good job for dubious reasons and now struggles to find another one. Nobody I know has lost their home yet. And people who lost a bundle in the market in 2008 seem to have recovered most of their losses.

As far as local businesses, I know we have seen many businesses go under over the past 3 years but a bunch of new ones have opened too. An organic food supermarket from a regional chain just opened in town. It was a frenzy. The chain's best store opening ever according to the manager. Restaurants and stores seem busy enough. We are still seeing a lot of luxury cars cruising around town including 2 Bentleys spotted in the past few weeks - a first in the 5 years I have lived here. There is clearly a glut of expensive homes on the market though. I think that prices for high-end houses and condos have come down. And we have seen government employees lose their jobs. Local governments are cutting back on some services too. Schools are being impacted by budget cuts from what I hear.

But if I look around my little world, it doesn't look anything like a great depression or even a great recession. My only window on the "real world" is the media.

 

[heyduke]

very slight slowdown here in the college based community i live in...

 

[WhoDaresWins]

I live in a small city in western PA (near Pittsburgh) and other than the real estate market I do not notice a visible downturn in the economy. The restaurants look well patronized, as do the mall and strip malls. Lots of traffic everywhere and hard to get a space at times. I work in government and we are always hiring for certain positions, takes me 3 weeks to get a hairdresser's appointment, months to get a dental appointment or optometry appointment, and I see people sporting "designer" attire and driving spiffy new cars. Health club does not seem to have declining membership. People still buying expensive stuff at both the groceries and the liquor store. I do not know anyone who has gotten laid off or has a spouse laid off, but I do know of children who have moved back home after college as they cannot find jobs that pay enough to live independently. I think the downturn might be more insidious. I write out checks to the food bank and an appeal I got from them indicates increasing need with more first time users than ever before. I was reading in the paper today that the homeless shelter has a waiting list. I have also read that there are fewer divorces as people stay together presumably for financial reasons. Probably a lot more under-employment exists now than previously, too.

 

[Walt34]

I see some evidence of the poor economy but not much directly. There were several foreclosures in our development, one three houses away just a couple of weeks ago, but as FIREdreamer wrote that was years in the making as they were always close to the edge anyway.

But restaurants are generally full, and I see plenty of new vehicles being driven. The owner of the motorcycle shop where I have my bike serviced says business is way down though. And a house a few door away from my FIL's house has been on the market for a year now. Yesterday's newspaper headline was that unemployment was up slightly. DW's nephew is underwater on his mortgage but plans to wait it out. He just got a promotion and a $10k raise so they're doing well.

So I suppose that for those who are established and have their financial ducks in a row it's more of an inconvenience if they notice at all.

 

[RonBoyd]

Shouldn't Dex say something about Waldo?

 

[Moemg]

There are still plenty of foreclosures here on the west coast of Florida . Lots of restaurants going under and stores closing but the good restaurants are as busy as they always were at this time of year . The people in this area hardest hit were all in construction or real estate .

 

[Moscyn]

When you ask to comment on local economy, I guess you mean in the US. Local to me mean Hong Kong and I must say there are a lot of people spending over here. Tourists come here to shop and eat a lot. Luxury items are on high demand. Property market is booming and the government is taking on cooling measures. Unfortunately, the gap between the haves and have not is getting wider and wider. This is a big concern.

 

[73ss454]

I went to RIO about 20 years ago and noticed that there was no middle class. You were either begging in the street or living in a beautiful high rise. I wonder if this is where we are headed.

 

[Carnage]

I went to RIO about 20 years ago and noticed that there was no middle class. You were either begging in the street or living in a beautiful high rise. I wonder if this is where we are headed.

I have had similar thoughts. People that are established with a job and savings will be okay, but younger and less-educated will struggle.

 

[RonBoyd]

I have had similar thoughts. People that are established with a job and savings will be okay, but younger and less-educated will struggle.

Yeah, cause the "educated" are not struggling now -- they all have high paying jobs... particularly the older ones.

 

[Stevewc]

I thought my area was doing OK until recently.
I drove to the place I buy by livestock/animal feed from over the weekend.
To my surprise they were selling every fixture, tool etc. and were closing the business. All the feed already gone. This place rented equipment for construction, gardening & basically a feed & seed store. I thought they had enough different strategies going to keep things moving. The owner told me they had been losing money since the market crash & construction work dried up.
Anyway, this morning I'm calling around trying to find a good place to get the bags of feed I need, I'm totally out at this point.
Steve

 

[ziggy29]

If you look at the bls statistics on unemployment by education its like 15% for hs dropouts about 9.8 for hs grads and 5.4 for 4 year college grads, and lower for advanced degrees.

Yes, but this is largely because underemployed and "overqualified" folks with degrees are crowding out those who don't, even for jobs that don't historically require them.

Just another symptom of the educational arms race we're seeing today.

 

[Coderguy]

Milwaukee seems to be doing great; still condos shooting up, packed restaurants. Some car dealerships are even coming back already. Real Estate isn't doing the best. On the unemployment note; I just took a 2nd job / part time work and I'm still being hounded. You have to be skilled labor; scraping through high school partying isn't going to cut it anymore.

 

[dex]

Yes, but this is largely because underemployed and "overqualified" folks with degrees are crowding out those who don't, even for jobs that don't historically require them.

Just another symptom of the educational arms race we're seeing today.

Yes, and the "Education Bubble" is the next one to burst. More and more students are being produced with college degrees (of varying quality and low demand specialties) and a large debt. The next wave of news stories will be about college graduates who will say 'I was told, a college degree was the ticket to the middle class, now I'm unemployed with ever increasing college debts.'

I remember news stories during the '70s recession about college grads pumping gas and driving taxis.