Sunday, December 19, 2010

Does this look like an economic recovery?

My wife, my mother and I have been shopping the last couple of weeks. We've been shocked by the lack of shoppers we've seen. The only places I've seen a good deal of activity are the grocery store and Sam's, and neither place has seemed any more busy than usual.

But don't just take my word for it. I was at Target yesterday, the Saturday before Christmas, and I snapped some pictures. These were all taken between 12:48 PM and 1:40 PM on 12/18/2010.

First the front end of the store.

Not terribly busy. Let's check Electronics.

Hey, that almost looks like a crowd. But not really. Mostly it's just four people walking by in the foreground. Here's what it looked like about ten seconds later.

Now for the back end of the store. First we're looking from the halfway point back towards the grocery section.

Now from the same spot looking towards the toy and sporting goods section.

Pictures don't convey everything. People could have been in the smaller side aisles that don't show up in these pictures. And some were. But not that many. The store just wasn't that busy. Neither the Electronics section nor the Toy section were crowded, not even on the Saturday before Christmas. (And the section of Christmas decorations looked like it had just been put up. Not many people were buying decorations either.) Not that long ago I remember when the Target I shopped at was busier than this on a random weekday in the middle of summer.

Also note that none of the carts look particularly full.

These pictures are from a Target on West Colonial Drive in Orlando. Admittedly it's only one store. And West Orlando isn't doing terribly well even by Orlando's standards. (The U-3 unemployment rate in the Orlando Metro area was 11.9% in November, up from 11.3% the previous month. More on this in a moment.) I'm sure the local Walmart is doing better business.

Our leaders insist we're in a recovery. I'm not convinced. As I mentioned the local employment situation got worse in November. But let's look at the broader picture of the whole state of Florida. From an article in the Orlando Sentinel last Thursday:
The statewide figure [of 12.0% U-3 unemployment] represents about 1.1 million jobless in a labor force of about 9.2 million. Total non-agricultural employment grew by 300 jobs from the previous month.
Three hundred jobs! Let's say we want the unemployment rate in Florida to get down to 5%, which is actually higher than it was pre-recession. That means that 640,000 currently unemployed Floridians (on net) need to find a job. At 300 jobs a month it will take approximately 2,133 months for the U-3 rate to return to normal. (That's over 177 years.)

Now you can accuse me of looking at the worst case. You would be wrong (we could easily lose jobs), but I can find a better case from the same article.
Since last year at this time, Florida has added 36,200 jobs – an annual growth rate of 0.5 percent. The national growth rate over that time has been 0.6 percent.
Okay, so the monthly average job gain of the last year has actually been a little over 3,000. So that means that it would take only about 213 months, or over 17.5 years, for the employment numbers to improve. And none of that takes increases in population into account.

And it's not just Florida. Consider California - the Golden State is turning into the Lead State. The most recent monthly unemployment report shows that unemployment in California is now as bad as Michigan. Michigan!

Then there was this sad story about letters to Santa Claus - increasingly children are asking for warm coats for their parents and money for the electricity bill. It's really sad, so I don't recommend the story for everyone. But here's the paragraph I found most telling.
Though many considered last year to be the toughest financially since the economic downturn began, Fontana said, it appears that more people are struggling this year, judging both from the letters and the decreased number of volunteers who sign up to fulfill some of the writers' wishes.[emphasis added]
I ask you again, does this look like a recovery?

UPDATE: My mother-in-law reports that the stores seem quite busy in Palmdale California. No reports on whether or not people are buying lots of stuff, but she did say that the Best Buy was missing several of the items she wanted - apparently sold out. I'm still not buying this as a recovery. Does anyone else have any observations?

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