Economists Say USA is in Recession
Two-thirds of the 52 economists interviewed by USA Today in their quarterly survey say the U.S. is now in a recession. Add to that those surveyed who believe we will be in a recession soon, and the number reaches 79%. If there is any lightheartedness in this tough business climate, it is when people joke that the Feds will take six months to declare what most people experienced in their businesses six months before.
The good news is that the 52 economists interviewed feel that the recession will be “short and shallow and inflation will abate.†Eighty-seven percent of those surveyed expect the Feds to reduce short-term rates to 2%. Inflation was 4% in March, and they feel it will decline throughout 2008. Unemployment will reach 6%, which they feel is low for a recession.
But there was no explanation or rationalization of the terms “short and shallow.â€
From a different angle, FoxBusiness.com’s article this morning reports “The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday.”
“The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly”, FoxBusiness.com also stated.
I will say that I’m seeing many of our clients dealing as well as they can with the reality of the recession. They have moved out of the stages of confusion and what looked like paralysis earlier in the year.
Our advice is to plan the fall and holiday very conservatively, to avoid severe inventory buildup. There has been less promotional activity in 1Q 2008 than there was in 4Q 2007. Most of our clients are going to be very careful to avoid major mailings in front of the election.
What are other businesses planning? Readers, how are you planning fall and holiday 2008? Let us know.
Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.
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