Even before the recession hit (darn there I go we are not in a recession by technical standards) we heard that the economy sucked. Never mind that we had the longest growth in U.S. history and unprecedented unemployment.
A new article at the Washington Post mirrors my sentiment in Why We're Gloomier Than The Economy.
Soft? You betcha. In recession? Quite possibly. And a crisis in the financial markets has rattled nerves for months now. But so far, the economy is holding up better than it did during the last two recessions in 1990 and 2001. Employers haven't shed as many jobs, the unemployment rate is still relatively low, and gross domestic product has kept rising. Things are nowhere near as bad as they were in the Great Depression, or even during the severe recession of 1982-83. The last time consumers were this miserable, in May 1980, the jobless rate was 7.5 percent and inflation was 14.4 percent. Now those numbers are 5.5 percent and 4.2 percent respectively...This has left economists trying to figure out why Americans' perceptions are so much more negative than the data analysts use to measure how things are going....
Wellesley College economist Karl E. Case and two co-authors researched how changes in the value of homes affect what people spend and got a curious result: When home prices are rising, people spend more money. When they are dropping, they don't spend less money. With stocks and other assets, by contrast, spending both rises and falls with prices...people spend more when house prices go up and worry more when prices go down, but don't actually spend much less," Case said. "That could explain why consumer spending numbers have been much more robust than you would expect if you look at consumer sentiment."
And it is getting old to hear folks claim this downturn is a complete meltdown in the economy. Not to sound like Lyoyd Bentson to Dan Quayle in their VP Presidential debate. But, I knew the last recession and as bad as it may seem this is not 1990! And the old timers who sold houses in the 70's would say the same to me and you. The lesson is the markets go up and down. A fool does not prepare for either. Since I no longer sell real estate after the last downturn you can guess how well I prepared back then.