Recently up here in Canada, Q4 GDP numbers were released. The numbers were nothing short of fantastic, with economists likening the 5.0% annualized growth rate as Canada’s 15th gold medal. Combining this with the 0.9% increase in Q3 means that, technically, Canada has emerged from the great recession.
In the U.S., the numbers were even better. Q3 GDP growth was 2.2%, while the 4th quarter’s growth was an impressive 5.9%. Clearly, the stimulus money is working on both sides of the border.
In my small town, the economy is still the pits. There are a glut of new listings in the real estate market, with hardly any getting sold. Oil and natural gas activity is tepid at best. My contacts at a local grocery store tell me that average order sizes are down, as well as sales of more luxury products. Heck, I even stopped going out for lunch. (Granted, this has more to do with saving money for my Vegas trip than general economic activity.)
I was chatting with the manager of the local Sears. In small towns, often the Sears is the go to place for appliances, electronics and furniture. Our Sears is no different and our local manager runs a great store. Yet his sales are down 50% compared to last year’s, and last year’s sales were down 20% from 2008. He’s just the manager, so his job is safe, but he did express concern about laying off or cutting back hours if the economy didn’t pick up.
The bottom line is, around my hometown anyway, the recession is still here.
How about where you live? Are companies hiring? Are people spending again? Or is it just like the recession never ended?
Often, general economic growth will give us one message, while local conditions will give us another. When that happens, which should we believe?
General economic numbers can be as positive as they want, yet they’re of little solace when a local economy is struggling. Short of moving, there’s not much a person who lives in my town can do except wait it out and cut back while they’re waiting. General economic numbers are just noise and should be treated as such. Sure, the big picture is important. I don’t want anyone to believe that I’m denying that. But for most people, the local outlook is far, far more important.
So just because GDP numbers tell you the recession is over, it doesn’t mean that we’re out of the woods yet. The average Joe should spend much more time focusing on their local economy.