Forget the Consumer Index and those ubiquitous spending reports. There are some very simple homespun ways to know when the economy is improving. And based on our methodology, which is at least understandable to laymen, if not scientifically accurate, here are the signs to look for:
1. When the Gym is Empty in the Middle of the Day Again
Long, long ago when people had full-time jobs, they went to the gym either early in the morning before work or on their way home from the office. Somewhere around 2009-2010, it became near impossible to get a treadmill at 11 a.m. Gym use, for those who could afford it after their morning latte stop, became a late-morning or early afternoon activity.
Truth is, gym memberships in this country has held steady, which speaks volumes about our commitment to burn off the fat and stay healthy, even when we are financially circling the drain.According to IBISWorld research, the number of gym memberships has grown steadily during the past decade, from 29.5 million in 1998 to more than 40 million in 2010. In the five years leading up to 2010, the number of gyms and fitness clubs increased at an average of 0.5% per year to 32,820. Remember, this was in a recession. "In 2009, gym membership and attendance was actually at its highest," says industry analyst Dmitry Kopylovsky.
So how is this a barometer of the economy? Watch for time-of-day use, not gym membership totals. When all the treadmills are empty in the middle of the day, you can figure enough jobs have been created for us to call it an economic recovery.
2. When You Can Sell a House in 90 Days
Let's face it, "for sale" signs are the poster image of the Great Recession.
About a million homes were foreclosed on in 2010, and 2011 is promising worse numbers, according to Realty Trac, the Bearer of Bad Numbers.
In a healthy economy, houses sit on the market for an average of about three to four months. You can count on listing in March or April and have the kids in a new school come September. In 2010, the average number of days nationwide that a house sat listed for sale was 164.16, says Realtor.com. Every market is different, of course, but you get the drift.
Our barometer here is days on the market. As long as they are in triple digits, the economy has not recovered. When you can again sell your house within three months of listing it, things are looking up.
3. When People Order Appetizers and Desserts Again
Restaurant business overall has fallen over the past three years, according to the National Restaurant Association.
Eating out is something we do now on special occasions and at that, we are splitting more entrees and drinking the house wine. We know couples who do their appetizer and dessert nibbling at home and in some cases, drink a glass of wine at home too before they go out to the restaurant. The idea of cooling your jets in the restaurant lounge with a pre-dinner cocktail is long dead among the recession-weary.
But here's the good news: Restaurant industry sales in 2011 are expected to reach a record $604 billion and sales are projected to improve 3.6% over 2010 sales. Why should you care? Every dollar spent in restaurants generates $2.05 in the overall economy and restaurant employees comprise nearly 10% of the entire U.S. workforce.
In the meantime, happy hours have become the new version of dining out. And there's a certain cache to catching the early-bird specials. Seniors didn't get old by being stupid, now did they?
Our barometer of economic improvement: When we start feeling flush enough to order the wine and the dessert again.
4. When We Stop Deferring the Deferred Maintenance
The HVAC/plumbing/electrician industry reached a high in 2008 with $320 billion in revenue. The industry experienced significant declines in both 2009 and 2010. Employment dropped from 1.9 million in 2008 to 1.5 million in 2010 (a 22% decline), according to Daniel Berch, director of Anything Research. The number of repair companies declined by more than 10,000 and existing companies reported 2010 revenue that was 17% lower than revenues in 2008.
That means we've been living with our leaky faucets and have become do-it-yourself repairmen for our homes. It also means that new house construction has slowed to a snail's crawl and the guys who would normally be installing air conditioning and heating units are now hoping Wal-Mart is hiring greeters. Hopefully, some of them are also getting some computer training, but that's a topic for another blog post.
Our barometer for economic recovery? When it takes three days for the plumber to show up and hiring the electrician means getting on his waiting list. The rockstar cabinet maker you need for your kitchen remodel? Take a number and wait. While homeowners aren't likely to be thrilled with this return to the boom-ways, you can bet the tradesmen will be.
5. When Mortgage Lenders Actually Start Competing for Your Business
Why is that commercial even still being aired? Nobody is competing to give you money these days. Lenders make borrowers jump through so many hoops that you'd think you were in the animal ring at the circus. We've heard of lenders who ask to see three years' worth of income tax filings and then essentially audit you. Thanks guys, but we send enough money to the IRS for that privilege.
If people can't borrow money, they can't buy houses, grow their businesses, expand their staffs, build buildings, etc. Until the money faucet gets turned back on, the economy will stagnate if not come to a screeching halt altogether.
And while perhaps not a full-fledged barometer of how the economy is doing, we'd like to add a sixth sign: When Walletpop starts writing about great deals on luxury travel and you rush to book them. Until then, how are you spending your staycation?
Several Walletpop writers contributed ideas to this list.
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