We’re written before about the economic downturn of 2008 and its probable causes. Also, that in the intervening years from 2009 on, slow but steady economic gains were posted. These gains continued through 2016 when the U.S. economy had almost returned to its 2007 highs. What has happened since, in essence, how are we doing? This article covers what changes have occurred, along with the steps we can each take to weather any long-term economic turbulence.
Economists point to six economic indicators to determine the United States’ fiscal pulse. These leading economic indicators are currently in what has been termed a “Goldilocks economy”, that is not too hot or too cold. At the end of the second quarter of 2018, the Bureau of Labor Statistics stated that 213,000 jobs had been added across the U.S. in June 2018; 150,000 new jobs is considered ‘strong’. Another indicator, the Gross Domestic Product, is just over the threshold of healthy, at 2%.
Durable goods, such as machinery and its components, heavy equipment, and raw materials fell over half a percent in June, so this indicator bears watching to see if it trends. The Stock Market is also in a temporary correction phase, which economists also consider healthy. Rising inflation is actually an indication of fiscal good health, Inflation is inevitable, and according to the Federal Reserve,it represents increased demand for goods and services which spurs economic growth. So if we are paying more at the grocery and at the gas station, this is somehow a good thing…(?!) economically, anyway! Know that there is a system of checks and balances in place and should interest rates and prices rise too quickly, that remediation initiatives will be swiftly implemented.
For most consumers, however, the only way to really determine how the economy is doing is to internalize the question. Has the quality of your life and/or your family’s life improved? Have you had a raise or cost of living increase recently? Do prices at the grocery seem high, even for seasonal foods? Are you able to save a portion of your paycheck and/or put a percentage away as savings/investments? Do you have to drive from station to station to pay less at the gas pump? Are you planning to take a vacation this year? Can you think about buying a new car or making home upgrades? Do you dine out as often as you once did? If you’ve seen even small improvement in most of these queries, then the economy is doing just fine. If not, there are ways to make your money go farther:
- Cut back on cable and subscribe to streaming services instead. You’ll realize substantial savings on home entertainment without the need for wires and a box by the TV.
- Dine out less and get to know Groupon and other websites that offer discount entertainment and personal services options.
- Buy in bulk: yep, those warehouse stores have long checkout lines for a reason. Great values are to be had. Families may consider purchasing a freezer and stock up on sale items.
- Grow your veggies: do what your grandparents did; grow your own produce and can or give away the surplus. Nothing tastes as good as fresh-picked produce. Your co-workers, friends, and neighbors will thank you.
- Fire the landscaper: lawn mowing is good exercise. There are many battery-operated non-gas powered models that cut just as well. These are very quiet so you can mow late in the evening or first thing in the morning without disturbing the neighbors.
- Stop going to the gym: fitness equipment can be found at low cost or for free through online sites, thrift stores, and even garage sales.
- Buy second hand clothing. The internet has spawned many online thrift shops primarily featuring gently worn or new with tag clothing from major retailers at very substantial discounts. This is also the guilt-free way to purchase a coveted luxury item, such as designer shoes or a handbag, without breaking the bank.
- Carpool: Expressways even offer a proprietary lane just for those doubling or tripling up on their commute. Also, you’ll save on gas and vehicle maintenance, too.
- Cancel your dental insurance: buy a membership in a dental plan instead and save up to 60% on procedures.
In our working lifetimes, the economy will continue to ebb and flow. One of the best ways to ride out a period of lagging growth is to rein in our spending as much as possible. Then, during times of stronger economic health, to save more while continuing to spend less. After all, and we’ve said it before, but it is well worth repeating: it’s not what you make, it’s what you keep.