If someone were to come up to you and say “I’ll give you $100 if you can explain to me how our economy got into the current mess that it is facing,” could you earn that Benjamin? I don’t think too many of us could. We may not be able to explain what is going on or how we got to this point, but most of us realize what is happening to the U.S. economy is not good for it… or for us.
The result of the daily media analysis of our economy is that confidence in it is shaken badly. It is a real concern for sure, and that concern has been elevated by the frequency of messages from the media. If you hear something enough times, you will begin to believe it. So, if people were skeptical of the economy being weak or even oblivious that there might be something amiss, the gloomy tone of coverage has convinced many of these people that they should be worried.
The concerns we have are forcing us to curtail spending and consumption in many areas, notably clothing and dining out. Some categories may be insulated somewhat from the frugal consumer, most notably entertainment. Sales of video games and DVDs continue to be unaffected overall by the economic slowdown. In fact, it is these indulgences that are a source of escape, taking our minds off of tough economic times. Businesses that sell products or services that can meet this need may find some solace in a period when sales and profit expectations are uncertain at best.
Link: The New York Times – “Full of Doubts, U.S. Shoppers Cut Spending”