I’m not gonna lie. I’m kinda feeling it. I heard a profound statement recently: “Do you want to know when we are officially in a recession? It’s when the mainstream media won’t shut up about it.” Whether we are in one, or about to be in one, if the media continually drones on and on about it, it’s here!
That made a lot of sense to me for a number of reasons. Here is an excerpt from a column I wrote during the last recession:
For me, the recession really started the first week of October, 2008. DHL, the worldwide delivery company, decided to pull out of the domestic delivery business in the fall of that year. The summer of 2008 was when gasoline went up to $4 and $5 a gallon at the same time the shipping business was falling off the proverbial cliff. The company that handled my shipping switched me from DHL to UPS. A seemingly routine activity, but it was this move that caused me to remember exactly when it happened.
Today, we have Amazon pulling out of the domestic delivery business and gas being over $4 a gallon.
Then, the next month, I wrote this:
Right before the recession started I remember all the news media droning on and on and on about a possible financial collapse just over the horizon. I remember thinking that if they’d just shut up about it, it might go away. Well they didn’t shut up about it and it didn’t go away.
I’ve taught a class for years that many of you have attended called, Navigating Your Business Through a Disaster. As a long time first responder, one of the first things you learn is that most disasters (recessions included) follow a somewhat predictable pattern. If you can isolate and identify the pattern, your chances of a successful navigation are greatly increased.
Since I’ve covered (and survived) several economic downturns, and at least one recession, here are the things I’m watching right now in order to try and help you navigate this recession that the powers-that-be refuse to call a recession.
Anyone who’s put gas in their car on a regular basis over the last 5 years knows what’s happening there. Enough said, recession.
I’m a grocery store buff. I literally go to the grocery store 6 – 8 times a week. Why? Because I like going to the grocery store. That being said, I’m fairly familiar with the price of things at the grocery store. I’ve been buying this specific store-brand bagged salad for years. I do it for two reasons. One, I like it. And two, it’s only $1.99 and will feed 4 people. Over the last year, it has gone up a few times and now is $2.95. The butter I like was 1.99, and has been for years. It was $2.73 this morning. I wonder what caused that? I’m going with recession.
As I’ve said many times before, this is the one economic indicator I don’t follow closely enough to write about. But, over the last 6 months, I know the feds have raised the rates ¾ of a point a couple of times. I don’t really know why, so I’m just going to blame it on a recession.
Yikes, it’s crazy, so why bemoan the point. Let’s just put that one in the recession category as well.
Finally, something that’s not so bad. This one has me perplexed. In all of the various ‘down economies’ I’ve written about before, job losses were a huge problem. We are in a weird time where all kinds of bad things are happening with the economy, yet almost every business I talk to is short staffed. That’s weird, but maybe the next topic might shed some light on this dilemma.
$9 an hour job suddenly paying $18
Anyone who owns or manages a business knows all about this situation. A couple of years ago, a part-time 10 – 20 hour a week position paid between $9 and $12 an hour. There were many employees out there that were worth their weight in gold. But, there were also many that weren’t. But, sometimes you just need a warm body to cover the floor so you dealt with it. Now the above position is currently worth $18 an hour, and a lot of business owners are just leaving that position vacant. If someone wasn’t worth $10 an hour, they damned sure aren’t worth twice that.
Although, the situation with the wages was going on long before ‘they’ started trying to change the definition of the word recession. I’m just gonna sit back and watch, and see where it ends up.
War in Ukraine
I see the videos and read the news reports. I don’t connect a lot of what is going on over there to what is going on here, but I’m sure there is some impact. The only thing I know for sure is what is happening is horrible and I pray every day for it to come to an end.
Traffic in our Stores
This is the one that’s hitting me in the wallet right now. My business relies on people coming in MY front door – and YOUR front door. I do trade work for stores across the country and everyone’s traffic is down it seems.
The one indicator I’ve been able to go by for decades is watch battery replacements. I charge $10 to replace the battery in your watch while you wait. Yes, I know I could charge more, but I don’t for a reason. $10 watch batteries are my ‘loss leader’. It’s the thing I sell cheaper than anyone else in town to get customers in the store. When the watch battery business dries up, all of the other business dries up as well.
The one thing that’s keeping me from going crazy right now is it’s still my slow season, so it’s supposed to be slow. I just can’t decide if it’s the usual seasonal slowdown, or a major economic slowdown that’s rearing its ugly head in that one sector of my business. During the slow season, I kind of know what to expect when it comes to my loss leader. That’s why I do it. It just feels different this time. It just feels economic.
I guess all we can do is buckle up and hang on for the ride. And at least be happy that we’re not talking about the pandemic any more.