Wednesday, January 16, 2008

Sea Change? Recession?

The problem with sea changes is you don't know they've happened until they are over; ditto recessions, I hear. There's a quite a kerfluffle in the business media about the Commerce Department's report on December spending, which was down and dismal. The conventional wisdom is that we may be in a recession and people are not spending because they are earning less and/or worrying more about finances. But is that the whole story?

Clothing sales declined 2 percent, the most since September 2005. Sales of sporting goods, music and books also fell 2 percent. Car sales and department store sales each dipped 0.4 percent. Gasoline station sales dropped 1.7 percent.Sales at furniture stores rose 0.6 percent. Sales at food stores and health and beauty stores rose 0.7 percent

  • What if some people weren't buying clothing because their closets were stuffed and they realized they didn't need anymore?
  • What if some people were buying less new, trendy clothing because they began to feel uneasy about the waste of resources associated with fashion's planned obsolescence?
  • What if some people bought fewer CDs and books because they decided to go to concerts and borrow books from the library?
  • What if some people bought less STUFF for holiday gifts but gave something less tangible?
  • What if gasoline sales dropped because some people walked, biked or took public transportation?

We probably won't know for a while (if ever) if December's figures are due to financial pressure alone or if consumption patterns are also changing. They've changed before, many times; why not now? (Just NWL being optimistic.)

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