What are you seeing in the economy?

[JDARNELL]

I will admit that I rarely watch what is going on in the economy anymore. However the last month or so I have been thinking about what I am seeing and what I want to spend $$ on. I just returned from a week cruise and had a great time splurging for a larger cabin, pacing myself on food and booze, taking less luggage etc. I read, slept, hung out etc. Right now there is nothing that I need or want to spend on.

Today I read this article and it makes sense on the business side. Why invest in capital equipment when there is so much slack in the labor force and the labor force participation rate is so low?
Companies Shy Away From Spending - WSJ


Two days ago I was at the local Walmart talking to some workers I have met over the last couple of years. One of the Asst managers overheard us talking and piped in that black Friday sales for the store were 23% less than the previous year. I am sure some of that is due to online shopping but no way 23%. This year there does not appear to be anything "must have" for the holidays. As I walked around the store I took stock in the items that are for sale and the price of things that were. Prices seem low and nothing of interest jumped out at me. Now is that because of my place in life? Maybe.

In my area there appears to be a shortage of homes and residential building is going strong but other than that I don't see a lot. I do see some commercial building but there is a lot of empty space.

I suspect truck and SUV sales are up due to low gas. I just helped my mom purchase a new 2016 Camry and the price was amazingly cheap. She didn't need it but her 2005 just rolled over 100K and she just had to get a new one. I just laughed. I could upgrade my fleet of vehicles but I would rather get a root canal than to think about a new car. Teenage drivers so lets just run these into the ground.

So are there pockets of bright spots you are seeing or are you seeing the same? I don't see a lot being produced.

JDARNELL

 

[Ian S]

Black Friday sales are spilling over to other days I think. Also the bad PR of those videos every year showing Walmart customers fighting over electronic baubles scares folks like me away from those sales. People are figuring out that sales are going on pretty much through December and have decided the horrors of Black Friday shopping aren't worth the few bucks of savings.

I'm noticing a lot of infill going on here in Phoenix: older buildings are being torn down and replaced. Guess the developers who got burned building far out in the sticks in the early 2000's learned a lesson.

 

[Fermion]

Copper is the thing that has me concerned. The price has dropped so low that the other day I saw some guys actually dump a load of copper wire from a wheelbarrow at a construction site and steal just the wheelbarrow.

 

[Rustic23]

I think the economy is worse than we are being led to believe by the talking heads and the media in general. I don't know if it is an agenda, they are lazy, or just stupid.

Example: Today there was a lengthy segment on CNBC about how well the auto industry did this past month. However, their numbers are not inflation or population growth adjusted. Any wonder more cars were sold at a higher price point than five to ten years ago? No, just a glowing report on how great things are. No comment on comparing car prices with different standard equipment and safety features.

Example: We have a 5% unemployment rate. No mention that we have one of the worst participation rate in about 10 years.

Example: We have a 5% unemployment rate, but no mention of a stagnant wage rate for almost 10 years.

DW and I were out on Black Friday, and again Sat. and today. We were in Sam's, Costco, Walmart, and a couple grocery stores. Only the grocery stores were crowded. On Black Friday no lines at either Sam's or Costco. In fact there were fewer cars in the parking lot than a taverage Wed. shopping spree.

OK, all anecdotal evidence. But, I still don't see a booming economy.

 

[jazz4cash]

I will admit that I rarely watch what is going on in the economy anymore. However the last month or so I have been thinking about what I am seeing and what I want to spend $$ on. I just returned from a week cruise and had a great time splurging for a larger cabin, pacing myself on food and booze, taking less luggage etc. I read, slept, hung out etc. Right now there is nothing that I need or want to spend on.

Today I read this article and it makes sense on the business side. Why invest in capital equipment when there is so much slack in the labor force and the labor force participation rate is so low?
Companies Shy Away From Spending - WSJ


Two days ago I was at the local Walmart talking to some workers I have met over the last couple of years. One of the Asst managers overheard us talking and piped in that black Friday sales for the store were 23% less than the previous year. I am sure some of that is due to online shopping but no way 23%. This year there does not appear to be anything "must have" for the holidays. As I walked around the store I took stock in the items that are for sale and the price of things that were. Prices seem low and nothing of interest jumped out at me. Now is that because of my place in life? Maybe.

In my area there appears to be a shortage of homes and residential building is going strong but other than that I don't see a lot. I do see some commercial building but there is a lot of empty space.

I suspect truck and SUV sales are up due to low gas. I just helped my mom purchase a new 2016 Camry and the price was amazingly cheap. She didn't need it but her 2005 just rolled over 100K and she just had to get a new one. I just laughed. I could upgrade my fleet of vehicles but I would rather get a root canal than to think about a new car. Teenage drivers so lets just run these into the ground.

So are there pockets of bright spots you are seeing or are you seeing the same? I don't see a lot being produced.

JDARNELL

I do actually believe a 23% drop for Black Friday sales is within the ballpark based stats I heard for online sales and BF sales being spread out over a longer period of time as well. Another indicator is UPS is advertising on the radio in the Wash DC area for seasonal help....loaders, drivers and driver helpers. Driver helpers get picked up from their residence!
Our house cleaner reported that one of the big malls in the area was closed early due to being at capacity on Thanksgiving evening (while we were still feasting on turkey, sweet potato pie and football).

One more point....lots of construction including what I thought was 500 or so unit luxury condo complex but turns out it's actually luxury apartments. Not sure I've ever seen such high end rental units this far away from downtown.

 

[Rick_Head]

Why bother watching. Can you predict (with any level of accuracy) what's coming and what to do about it.

I wasn't alive in 1932 so I missed a chance.

I had no money in the 70/80's so missed a chance on high interest rates.

I was around in the late 90's but worked in hi-tech and wondered why these evaluations. Missed those gains (and loses).

In 2009, I decided to buy. Only because if things continued to decline, I'm screwed anyway.

Today? Who knows. If I invest and things improve, great. If I don't and things get worse, I'm screwed anyway.

Quit worrying and start enjoying life. It may be your last chance.

 

[Senator]

Copper is the thing that has me concerned. The price has dropped so low that the other day I saw some guys actually dump a load of copper wire from a wheelbarrow at a construction site and steal just the wheelbarrow.

Good one...

Most of the places I see have help wanted signs. Not many workers.

The mega-corp I work for has many IT workers from India, I can be in a meeting with 15 peers, and 12 of the 15 are from India. We do not produce enough workers here.

Some of my renters are just getting by, but most are still doing well. The ones just getting by seem to be able to afford nice things though. One has a stay-at-home parent, it cost too much to afford day care yet they barely make $40K a year now.

I think there are many people that are just getting by, but are plenty happy to just get by.

 

[Mulligan]

I think the economy is worse than we are being led to believe by the talking heads and the media in general. I don't know if it is an agenda, they are lazy, or just stupid.

Example: Today there was a lengthy segment on CNBC about how well the auto industry did this past month. However, their numbers are not inflation or population growth adjusted. Any wonder more cars were sold at a higher price point than five to ten years ago? No, just a glowing report on how great things are. No comment on comparing car prices with different standard equipment and safety features.

Example: We have a 5% unemployment rate. No mention that we have one of the worst participation rate in about 10 years.

Example: We have a 5% unemployment rate, but no mention of a stagnant wage rate for almost 10 years.

DW and I were out on Black Friday, and again Sat. and today. We were in Sam's, Costco, Walmart, and a couple grocery stores. Only the grocery stores were crowded. On Black Friday no lines at either Sam's or Costco. In fact there were fewer cars in the parking lot than a taverage Wed. shopping spree.

OK, all anecdotal evidence. But, I still don't see a booming economy.

Agree with all. Plus the reality is a huge segment of society is not formally trained and the blue collar ticket to middle class is harder to find. Car sales have been decent the past few years but the average car loan I saw was 74 months...My Lord! Throw in the need for technology trinkets, and eating out often and that leaves little disposable income for the traditional consumer purchases.
I decided last year, "normalized rates" is just blather. I went long on everything dealing quality preferred stocks and have been rewarded despite coming late to the party. I hope they raise short term rates quickly. It will protect the long end like a warm blanket and flatten the yield curve out in no time if they dared.


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[Car-Guy]

I think the economy is worse than we are being led to believe by the talking heads and the media in general. I don't know if it is an agenda, they are lazy, or just stupid.

Example: Today there was a lengthy segment on CNBC

I stopped reading your post when you said CNBC since that answered your question, IMO.

Try FOX news, you'll get a different totally different perspective. Of course after a few days of FOX news you might want to quit listening to all the gloom and doom. FOX news is best "watched" with the volume turned off.

 

[Lisa99]

The local economy here in Hendrson NV appears to be great. Houses are going up again, there is a new Costco and IKEA being built and there is other construction happening.

 

[aja8888]

Any place where there is oil and gas production or services, the economy is not as robust as other places. Examples include west and south Texas, North Dakota, Colorado, western Pennsylvania, Oklahoma, northern and eastern Ohio.

 

[W2R]

Well, you knew what I was going to say, but let me consult my crystal ball and tell you what I am seeing in the economy.

Looking deep within my crystal ball.... I see the economy going DOWN, down, down.... then leveling off... then UP, up, up.... lather, rinse, repeat....​

Sorry, that's just the way it is! Or so says my crystal ball Hope you can get a better take on it than mine.​

 

[Kickernick]

We were reviewing global economic forecasts at MegaCorp today. 2015 finished much lower than forecast, largely due to China softness, and it's ripples through commodities. 2016 expected to start slow with global recovery in second half. We'll see - easy to predict, but someone has to develop the ideas that will fuel the recovery.

 

[Ticker]

I judge our economy by the traffic. The I-10/I-12 corridor is crazy busy, lots of trucks, lots of service vehicles. Baton Rouge has the worst traffic that I have seen in years, and I don't associate it with the low price of gas. Folks going to work or going shopping. New Orleans is the same.
Also, I am getting more and more junk mail, another indication of the economy. The only great thing about 2008 was the reduction in flyers that were mailed to me.

 

[brewer12345]

Hmmm, you think maybe economic data might be a tad more indicative of what is happening in the economy than CNBC's dribblings or some anecdotal observations?


Just asking...

 

[sansha]

fRe Black Friday sales, last year, the sales right before Xmas were better for the customer than the Black Friday prices. So perhaps customers aren't buying as much, waiting for even better sales. That being said, my brother went to Costco I think on BF morning early (to buy laundry detergent and TP) and he reported there were only half dozen cars in the lot.

 

[CaliforniaMan]

Hmmm, you think maybe economic data might be a tad more indicative of what is happening in the economy than CNBC's dribblings or some anecdotal observations?


Just asking...

+1000
As I read through this thread was thinking the same thing What? Economic data?

 

[Ed_The_Gypsy]

Perhaps it is the demographic transition that Harry Dent forecast.

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[NW-Bound]

Different segments of the economy and different locations have different experiences. But overall, I think the US is just chugging along. GNP of 2% annual growth, I thought. Just ho hum, and it shows.

 

[audreyh1]

The US economy is doing better than flat - more like (very) slow and steady. It is doing much better than the rest of the world, and I don't see that changing real soon. Strong dollar and low commodity prices are helping the consumer.

On the other hand, the U.S. economy is overdue for a recession (purely as a function of time), and maybe in 2016 other country economies will show signs of pulling out of their funk.

 

[MichaelB]

Hmmm, you think maybe economic data might be a tad more indicative of what is happening in the economy than CNBC's dribblings or some anecdotal observations?

No kidding. Employment is rising steadily, auto manufacturing is solid, spending on construction is rising, and the single most forward looking indicator for future economic performance, new home construction, is positive and trending up. No recession on the horizon.

This is definitely the Rodney Dangerfield economic expansion - can't get no respect.

 

[jazz4cash]

Hmmm, you think maybe economic data might be a tad more indicative of what is happening in the economy than CNBC's dribblings or some anecdotal observations?


Just asking...

I do generally, but that wasn't the question. Looking at the data you still have to allow for many intangibles. Oh, wait I guess there's "data" for that too.

 

[brewer12345]

I do generally, but that wasn't the question. Looking at the data you still have to allow for many intangibles. Oh, wait I guess there's "data" for that too.

This isn't China or north Korea. The data are not just made up. Is it incomplete and somewhat contradictory at the moment? Sure. But it is a lot more credible than anecdotes. I will see your doom and gloom and raise you an overheating. Local to me they cannot build fast enough, all I see are new cars with prices over 30k, stores are busy and you cannot get anyone to work on your house. Everywhere is hiring and judging by all the job listings banks are actively lending.

 

[marko]

To borrow from William Gibson, I see the economy as doing well, "but it's just unevenly distributed".

Some places and people are doing very well, others not so much but it is not a zero sum game as the media would like to have you believe. I suspect many/most folks on this forum have done quite well in the market since the end of the recession.

What I do see is a lot of young folks who should be going to trade schools to become plumbers and electricians are being brow-beaten into going to college, taking on huge student debt and end up dropping out. Now you end up with a 22 year old who's "done with school forever" and has no skills at all and giant debt on his shoulders.

One thing for sure: I can't drive 2 miles without running into a construction site...somebody is making money.

 

[Rickt]

Economy is chugging along just fine, it's not gangbusters but growing slowly. We have seen our volume in units up by 4.6% thru November 2015 compared to the same period last year. Traffic on I-70 seems good as well including truck traffic---good for the economy. Unfortunately there is a shortage of low skilled workers, truck drivers etc.