Wednesday, June 29, 2011

They're Everywhere


Babies.  Everywhere you go lately it seems someone just had or is about to have a new addition to their family.  This is expected around this time:  serious, investigative research (of the google variety) shows October 5th is the most common birthday.  You can understand the timing but lately it’s so pervasive you almost wonder if it’s contagious.

Babies have many benefits to many people: not only are they great news for the families they belong to but they are also great for the economy (bonus: benefits carry though the short-, medium-, and long-term).  Babies require spending that goes on to induce consumption in all areas of the economy.  Some short-term spending gains include healthcare, and retail sectors such as furniture and clothing and apparel (assuming it is not all imports, bad).  The cherry on top: Baby showers, aren’t they a boon for Babies ‘R’ Us?  They really get you.  Planning for a baby is as big a production (if not bigger) than planning a wedding (with an engagement of 9 months).  For the friends, the only difference between a baby shower and a bridal shower is that “bingo” becomes “babyo.”

Another “baby bump” to the economy that is great, especially right now: the tendency for the expecting families to need bigger houses.  The housing market, as those of us home owners know, is still down for the count.  But maybe this year’s crop of babies are the answer we’ve been looking for.  Data released today shows pending home sales are up 8.2% in May over April.  Coincidence?  Maybe.  (Spring also happens to be a popular time to move in general because the weather is nicer and school is ending for the year, but let’s put that aside for now.)  Yet even with such a large gain, it fails to offset the (revised) 11.3% drop in pending home sales in April.   This also comes after data released last week shows existing home sales fell 3.8% in May (and by 15.3% over last May) and new home sales fell 2.1% in May (though have been relatively stable over the past year).  Can we count on the impending baby boom to pick up some more slack here?  Let’s hope so.

Perhaps it is also this year’s crop of babies that have helped to stabilize home prices (or home values for you homeowners) over the last few months.  An index of home prices for the top 10 and 20 major cities released Tuesday indicates in April home prices increased (albeit slightly) for the first time in 8 months.  Again, though, more baby power is needed.  Seasonally adjusted, prices were flat (0%) in April.  Further, prices are 33% below their 2006 highs (we are at 2003 levels), and average prices have increased by less than 2% from their 2009 lows.  To be fair, prices may have been artificially inflated and we may not see 2006 prices back for a long time.  But still, more babies may imply more home sales (or bigger – more expensive homes) and higher prices (values).

So it turns out babies can be productive and help create value in our economy even before they are born (who said they had to finish school to start making a real contribution?).  And this adding value thing is important work.  Perhaps then we should cut them some slack.  The next time we hear a screaming baby in the store, in the restaurant, or on public transportation, we should remember the value they bring to the economy in the short-run and to our wallets in the long-run.  Or at least have ear plugs handy.

(National Association of Realtors, Standard & Poor’s Case-Shiller Home Price Index)

Monday, June 27, 2011

Sweet and Sour


Many things in life are good and bad (or “not-so-good” for you optimists) at the same time. Like it’s finally summer but the kids are home (hello, summer camp!). Or you played hookie for the day to go to the beach but learn the hard way that you weren’t the only genius “sick” that day and sit in hours of traffic. Or you are excited to have a long weekend but find yourself attending a funeral and a baby shower in a two day span. The list goes on. Isn’t life fun!

We’ve learned some lessons over the last few years about money. Some good, some bad: we’ve learned that a lot of debt isn’t sustainable (whoops) but hopefully we’ve also learned some better money managing tips. Our new and improved financial antennas should help us keep our finances on a channel we can live with (and one that hopefully also shows Glee and American Idol). We can still spend money but we should keep spending within our means (“spending in moderation”). Shockingly, binge spending is just as bad for you as binge eating.

Keeping our antennas finely tuned into how much money we have (and what our expenses are) can help. Data released today shows nationally our disposable income (spending money) increased in May by $29.2 billion (or 0.2% over April). Of course, then comes the less appealing: “real” disposable income (spending money after adjusting for price increases) increased by 0.1% - not great, but better than the 0.1% decrease in real disposable income in April. Overall, however, as a nation our real disposable income has seen pretty negligible gains over the last year. At least it isn’t declining!

Our personal spending (on all things not just retail), which is an important ingredient in keeping the economy alive and well, flat lined in May. In May, our personal spending (“personal consumption expenditures”) increased by $4.6 billion (or 0.0%) after increasing by $28.8 billion in April. The flat spending in May isn’t all bad – the slower spending was likely due to the (albeit slight but still welcome) drop in gas prices. However, there is some not-so-good data too: after adjusting for prices, “real” spending declined in April and May, the first months to have real declines since January 2010.

It’s not surprising that we (people, businesses) are being more careful about spending – perhaps we’ve learned our lesson on money management! Can’t spend what we don’t have, very true. Next we can sell our money managing secrets in a “Money for Dummies” book for those young on money handling experience in other countries (Ooo, Exports! Bonus.). That’s one way to give our economy some lemonade from the lemons. Let’s try to keep the sweet and sours in life to stuff beyond our control (and Chinese food).

(Bureau of Economic Analysis)

Wednesday, June 22, 2011

Steady as She Goes


We all have those moments: we just want to do what we need to do to make it through the day (is it time to go home yet?).  And for most of us our days follow a pretty steady (some might say “boring”) routine.  We get up, go to work, run errands, babysit (parent), make dinner (following the new USDA “food plate” rules of course) and if there is any time left we may try to do something for ourselves (like go to the gym, or go to the gym through osmosis of watching other people workout on TV).  This is what people like to call “work-life balance.”  Really our objective is to try to keep a happy balance in our lives of getting everything we need to get done done and also have some fun time leftover.  

In other words, most of us avoid making waves in maintaining our daily life balance.  Sure there are “bumps”: we all dabble in the occasional “friendly” gossip (ever time how fast a rumor gets around the office?), or we may get angry and have some choice words for our fellow citizens who have driving issues or work in customer service.  We may also love reading about mud-slinging between “frenemies” (Paris v. Kim, T.O. v. everyone).  Even political figures make the cut (Bristol Palin wrote a “memoir” slamming Meghan McCain as a “snobby whiner,” this could turn into a chick fight).  But underneath all that we are peace-loving people right?  

Our economy acts in a similar way – it stays on a steady course with some bumps along the way.  These bumps can be good or bad (the latest "bump" was bad).  And just like how we try to keep a happy balance in our lives, the Federal Reserve (the bank of the U.S. Government) has the job of keeping a happy balance in the economy.  That is a tall order; we have a hard enough time keeping our own lives moving forward at a happy, steady rate let alone worry about 300 million other people.   There are a lot of us who are still feeling the pinch from the 2008-09 recession, especially in the jobs department (our average hourly wages, after adjusting for price increases, went down over the last year by 1.6%).  But getting us all back on track is exactly what the Fed is trying to do.  How?  Through a couple of different ways, and this is what we hear about on the news.  One of our problems has been getting loans, as individuals and as businesses to have money to pay for the stuff we need or stay in/grow business.  So, the Fed has been “injecting” money (aka “liquidity”) into banks and businesses (called “quantitative easing”).  The Fed has done this twice (the second time dubbed “QE2” for short) and will end that at the end of the month.

The main way the Fed is trying to get the economy back in balance is through a special short-term interest rate (called the “Fed Funds Rate,” that is the cost for banks to borrow money held by the U.S. Government).  Again the point of influencing interest rates is to influence how much extra money is in the economy (“money supply”).  The key here is that the interest rate set by the Fed filters down into the interest rates we see at the bank (a controversial assumption).  So, the idea is that when interest rates are low, people have less incentive to save and more incentive to spend, generating economic growth.  Similarly (as we know from the mid-2000’s) low interest rates can make it more affordable for people and companies to borrow money, also encouraging spending.  Too much extra money can increase prices (“inflation”) because of the increase in our spending, so there is a delicate balance.  Right now the Fed wants the economy to grow, to encourage spending, to get companies to hire more people, and to get our housing prices back on track.  So it is no surprise that the Fed decided today to keep the interest rate (the Fed Funds Rate) at its historic low, between 0-0.25%, and the Fed intends to keep rates this low for an “extended period.”  Steady as she goes, the rate has been this low since December 2008.  

The hope is that these low rates will trickle down to helping us, the country, restore balance by providing the appropriate environment that will enable us to work, eat, and live in our happy, steady, balanced way.  However, it’s taking a bit longer than anticipated (the bump is in fact a hump), and just like we sometimes take a step back to re-examine our relationships in times of stress so too may the Fed.  Perhaps the Fed should invest in Yoga.

(The Federal Reserve, Bureau of Labor Statistics)

Thursday, June 16, 2011

Going, Going, Gone

That was the general sentiment many of us experienced last night while watching the Stanley Cup Final (Boston won 4-0 over Vancouver).  After a thrilling (and “short”) 9 month season, it all came down to this last game. Both teams had a lot at stake.  But as is with all sports, there could only be one champion. Although Vancouver came into the playoffs ranked #1 (what do statisticians know anyway?) it’s not particularly shocking that Vancouver lost.  What was disappointing was how badly Vancouver lost given how hard (and long – did you see “9 month season”?) the team worked to make it to this game: they played the series with Boston out to the full 7 games and won all the preceding playoff rounds.  And the weight of all of Vancouver was on their shoulders: this was to be Vancouver’s first Cup victory in their 40 years as a team. 

So what happened last night – was the burden too great to bear?  Throughout the series the team was “going and going” to the finish but watching the team it was as if the only place they ultimately “gone” was fishing (or to early retirement).  Now what are they going to do – start all over again from the bottom?  And what about the Canadians (especially those from Vancouver) who were as sure of their imminent win as we were about being raptured?  How can they face the world with so much egg on their face?

There might be a solution to this whole mess that could be a win-win for Canada and the Stanley Cup-holding U.S.  As you may have noticed, the U.S. is in a mountain of debt.  Data released today shows our “current account balance” (checkbook with the rest of the world) came in at -$119 billion for the first 3 months of 2011 (yikes).  At this rate we will add $480 billion to our debt this year with the world (“current account deficit”), and this eventually has to get paid back – with interest (inflation, which subtracts from a debt’s nominal value, can only do so much here).  You may wonder who is balancing this checkbook, and why they are employed (did they pass grade school arithmetic?).  That would be all of us, buying more from other countries than they buy from us (to be fair, a lot of this debt is due to ever higher oil prices – but we all know debt is debt).  Now, if you’re in a pile of debt, and need to pay the bills, what do you do?  We start selling our valued possessions (Exhibit A: A woman was in news this week for selling an Obama signed letter to make ends meet).  The same can be true here – the Cup must be worth a lot to Canada, we could restore their national pride and they could help restore our budget.  Maybe $119 billion worth?


If Canadian teams insist on only getting the Stanley Cup the legitimate way (lame), the U.S. should take its latest competitive advantage in hockey and sell the prize to the highest bidder.  Given China’s rise in just about every way (did you see the last Olympics?), and given their Machiavellian winning strategy (did you see the last summer Olympics?) this “trade” might be something they are interested in.   Which is good, because last year we accrued $300 billion in debt with China, and we are on pace for another banner year (we took on $66 billion in new debt in the first 3 months of 2011).  What will our new debt be this year with China?  Hopefully, going, going, gone. 

(Bureau of Economic Analysis)

Wednesday, June 15, 2011

On Your Mark, Get Set…

Ladies, get ready to go.  Gentleman, be waiting at the finish line.  Hugh Hefner (Hef) is officially back on the market.  And at 85 years old, time is of the essence.  This is a race to the finish, and the last one standing wins (think of this as the next season of “The Bachelor” and ladies you’re in it to win it).  There are some serious gains at stake – for the (single of course) ladies and gentlemen (sorry happily married people you’ll just have to live vicariously).  First, whichever lucky lady lands Hef will likely land her very own E! reality show.   Second is the glamorous lifestyle Hef’s leading lady enjoys: living in a mansion (granted the 10pm curfew isn’t great), working hard on the tan, and mingling with celebrities.   Third is never having to wait on line for anything, ever.  Hey, it’s a tough life but somebody’s got to do it. 

Gentlemen, there’s potential for you to benefit too.  It’s no secret that Hef’s girlfriends have boys who are “just friends” on the side (as in Kendra was “just friends” with that football player and magically moved in with him right after she left the mansion).  If you just happen to be that boy “friend” it’s quite possible some of those benefits could trickle down to you (“friends with benefits”).  But wait, if you stick with it, there’s more.

As they say with most good things, at some point the relationship will likely come to an end (and no one will see it coming).  Looking at previous trends, Hef’s ladies don’t walk away empty handed, and there is a direct relationship (“correlation”) between the seriousness of the relationship and the post-relationship reward.  Case in point: Hef bought his last wife the mansion next door!  A beautiful new home would be a fantastic parting gift; it would provide a direct benefit to you and an indirect benefit to the housing market.  The housing market sure could use the hospitality – according to survey results released today (called the “Housing Market Index”) that depicts home builders’ confidence in the housing market, morale is low.  Home builders do not expect home sales to improve, as building costs are increasing while home prices and sales are decreasing.  An index of “50” or greater indicates more builders believe sales conditions are good than not – in June the index came in at “13,” the lowest since last September.  The index has not been above “50” since April 2006, and June was the 8th lowest month in the survey’s 26 year history.  Given the importance of the housing market to our economy (it’s pretty important – you saw what happened to the economy when the housing market tanked and how neither are fully recovered), at this point every home sale counts.  Which region has the weakest prospects?  That would be the Western U.S., maybe you could move into the other mansion neighboring Hef. 

What if others criticize this idea (are they jealous)?  Explain that underlying this master plan are the best of intentions: you see the economic recovery is weakening and you want to do your part to help (how thoughtful)!  You should be commended for your ingenuity, for your long-term plan to reallocate wealth to sectors of the economy (like housing) that are suffering.   Get ready, get set, GO.

(National Association of Home Builders)

Tuesday, June 14, 2011

Sorry, Your Call Cannot be Completed at this Time


You get a catalog in the mail and an item stands out far and away: its perfect, exactly what you’ve been looking for for months.  And you think it couldn’t have come at a better time, you really needed this, and you’re happy to cross it off your “to-buy” list.  You rush to your closest PC to place the order (maybe they’ll also have some accessories to go with it!).  You are able to successfully find the item and just as you attempt to put it in your “checkout cart” you read – “sorry, this item is temporarily out of stock.”  What a disappointment, how annoying.  You were so excited and now you might as well be at square one.  Who knows how long “temporarily” is – or worse, what if they never get the item back in stock?  Your day now has a black cloud, thank you store.

You wouldn’t be alone if you were confused by this development – aren’t businesses complaining that sales are down and are pessimistic about people like us spending more money?  Shouldn’t they want us to spend, so shouldn’t they be sure to have their items in stock?  To understand just how long “temporarily” is we may wonder why the item is out of stock.   Are people buying the item faster than it can be made (in which case you picked a hot ticket, trend follower) or are sales so dismal it is not worthwhile financially to keep the item in stock (cold ticket)?  Data released today shows our spending patterns over the last month were mixed.  Although we are still spending gangbusters compared to last May (up 7.7%), month over month spending was up by 0.3% (and down by -0.2% if you include cars & gasoline).  Last month we spent more at internet only stores (at least we are trying to), building & garden supplies (hello summer), and at pharmacies (big spender).  We spent less at electronics stores, furniture stores, and hobby & book stores (surprise) in May over April.

Another way we might be able to tell what “temporarily” means is by looking at trends in how much stuff businesses are keeping “in stock” (their inventories).  If businesses are building up their inventories it likely indicates that businesses expect to see increasing sales in the coming months.  That is good news for us, especially for those “hot ticket” items everyone wants that we just don’t want to wait for (what good is a bathing suit ordered in June if it doesn’t get here until after Labor Day, not helpful).  Conversely, if inventories are down, businesses are preparing for slowing sales and do not find it worthwhile to keep our favorite items in stock.  Data released today shows mixed news – Inventories went up in April over March, but at a slower pace than in March over February (0.8% vs. 1.2%).  Further, total reported sales in April were up by just 0.1%, after increasing by 2.4% in March.  This may cause businesses to hesitate to see where sales are going before adding large quantities of inventory.

Finally, we can look at the type of company we are trying to place the order with.  If the item “temporarily out of stock” was from a small business, there is reason to be less confident about the length of “temporarily.”  According to a survey of small business released today, small businesses are stuck in a cycle of not feeling the economic recovery.  The small business “optimism index” is rather pessimistic as small businesses say sales are down and prices are up.

Putting it all together, we may conclude that we shouldn’t hold our breath for the item to be imminently restocked.  Businesses are not sure if it’s worthwhile to have the quantity of stuff needed to have a stockpile since they aren’t sure where the economy is heading.  Perhaps if enough people put the item on their checkout “wish list” businesses would be more inclined to produce more of the item and have extra quantities in stock.  Or you could always call the company and nag them until you get an answer.  In other words, please hang up and try again.

(Census Bureau, National Federation of Independent Businesses)

Friday, June 10, 2011

Honest Abe


The amazing World Wide Web reports today that a man “stumbled” on $17,000 cash in the middle of a sidewalk.  First, why doesn’t this stuff ever happen to us, or people we know?  Second, the man turned it into authorities and “had no urge” to keep any of it (how noble).  What would you have done?  Think of all the ways this money could have worked for this man.  And if he was truly selfless, couldn’t he have done something really great to share it with the rest of us?  This man could have thrown the best party ever on this side of the Mississippi – we could have truly been the new generation of party people (just as JLo says we are).  Thanks a lot for doing the right thing.  Way to have a moral compass.

Given how much stuff costs these days, there may come a time when our Honest Abe (appropriately from Illinois) may wish he held on to that money.  Prices are always increasing over time, and not just for the goods and services we buy and consume.   It’s hard to miss the sizable taxes and other “fees” companies charge that are associated with the stuff we buy (try buying flowers online and we see that the shipping can cost more than the flowers!).   Given that we are increasingly buying stuff from other countries (imports), keeping aware of import prices can help us understand how our ability to spend (“purchasing power”) may be affected.  This is because the price we pay for imports, whether consumed directly or as an input into something we will eventually consume, will determine the ultimate price we pay for our everyday stuff.  In other words, because imports are so connected with the stuff we buy, the prices of imports are going to affect how far we can stretch our dollars.  Data released today shows import prices went up by 12.5% over the last year, or by 4.5% if you exclude petroleum (oil).  Let’s hope our dollars are stretchy.

In case you missed it, a large part of the price hikes we see (and the “fees”) has to do with petroleum (read: oil) prices over the past few years.  Data released today shows that from May 2010 to May 2011 crude oil import prices increased by 45% (although prices did show a slight decrease in the last month).  While paying at the pump is the most obvious sign of the price increase, high oil prices affect everything around us – from the transport of our goods to the energy needed to produce those goods (like cars).  You try going for a summer with no air-conditioning, see how many friends you have at the end.

Maintaining our quality of life is not getting cheaper.  Much of our everyday expenses depend on oil prices in some form or another.  Over the past 2 years (Q1 2009 to Q1 2011), the amount we spent on petroleum imports increased 104% (though it increased only by 26% in the last year, still not great).  Looking at real imports (adjusting for prices), it becomes clear price increases were entirely to blame (and then some!).  Honest Abe, can you honestly tell us you couldn’t think of better things to do with that $17K?

(Bureau of Labor Statistics, Bureau of Economic Analysis, Yahoo News)

Thursday, June 9, 2011

I'll Trade You

You like country music and your friend just got the last Kenny Chesney tickets. There must be something you can give them (its Kenny Chesney!).  Now bigger: America has three Kardashians, two Hilton sisters, and a “photogenic” Congressman who doesn’t like the burden of wearing pants.  Is it fair that we were endowed with such “resources” when the rest of the world doesn’t have any? (Sorry world, Germany already claimed David Hasselhoff and Italy was gifted the cast of the Jersey Shore.) Want to trade? (We’ll take an X-Factor from the UK to start.) We are willing to negotiate – all 3 Kardashians for Simon Cowell? But wait, there’s more: we’ll even throw in the fun loving Congressman if you call within the next 20 minutes!

We’ve been trading stuff with other people for as long as we can remember (and then some) – in fact, people have engaged in trading for thousands of years! Call it a sign of our advanced intelligence – or common sense – the basic idea of trading is to make all parties involved either indifferent or better off. More simply, trading is an efficient way to get what we want with what we have. It’s a habit we learn young, as in baseball cards and Halloween candy (not including the untradeable “candy”, like raisins). And then we get the secret ingredient for the big time trading – money. Then the gloves are off. The way trading evolves over the course of our lives is not unlike how its evolved over centuries, we are becoming more reliant on trading to get the stuff we want and need.

Not only are we trading more, but more people are joining the party (we’re global baby!). We are trading on a massive scale – data released today shows in April people in other countries bought $176 billion in stuff from us (exports) and we bought $219 billion in stuff from them (imports). You may have noticed that while trading in the small time leads to a “zero-sum” outcome (no one loses), in the bigger world our trading is a bit uneven. In other words, by importing more than we export, we are getting more value from other countries than what we gave for it – and common sense tells us that is not something we would expect someone to agree to indefinitely. Yet this difference in what we buy versus sell (called “trade deficit”) is growing.  On the positive side, from April 2010 to April 2011, exports grew faster than imports, 18.8% versus 15.9%.  If this trend continues, over time we can help correct the imbalance (good for us).

While we may want to share our most valuable “resources” with the world, it turns out what we do share is much less glamorous. From April 2010 to April 2011 the exports and imports that had the biggest (and almost equal) growth were “industrial supplies and materials” (like machinery and chemicals). What was a large source of the export-import imbalance (trade deficit) over the last year? The stuff we buy for ourselves (“consumer goods”)! For all of our talk of “Buy America,” over the last year we increased the amount of stuff we bought from abroad by $6.1 billion, while other countries only increased the “consumer goods” they bought from us by $1.6 billion.

We may not regularly stop to think about how the stuff we enjoy and rely on every day can come from all over the world (oh, I LOVE your sandals, were they made in China or Indonesia? And packaged in Taiwan, and transported on a U.S. ship to California?). Just as we rely on other countries, maybe we should think about how to make other countries just as reliant on us (we have so much to offer!). The rest of the world is another market for our stuff, and now they have money! What do you want to trade?

(Bureau of Economic Analysis)

Monday, June 6, 2011

Odd Jobs, Oddly Appropriate

We find “odd” jobs interesting – maybe because it proves that you can actually get paid to do something other than what you’re doing, or maybe because we are intrigued by what we don’t know (we like learning new things – especially when presented on TV!).  It made national news last week when the Library of Congress hired their first “Wikipedian,” and we love watching (I mean, “learning” about) the gritty occupational details featured on the many TV shows centered around odd jobs (like “Dirty Jobs” and “Deadliest Catch”).  There is even a website dedicated to helping you find “odd jobs” (like “muffin top model,” and they said you didn’t have what it takes to be a model).

If you are interested in a new line of work, now is as good a time as ever to go for that unique opportunity (minus those “get rich quick if you call in the next 20 minutes” MC Hammer ads).  According to data released Friday, new “mainstream” job opportunities weren’t as plentiful in May as they had been earlier in the year.  The economy added just 54,000 jobs in May, the lowest monthly amount since last September.  (Private sector, where most of us live, added 83,000 jobs and local government lost 28,000 jobs.)  While the fact that the economy is adding jobs is good, smart people agree the number of jobs added to the economy since the recovery began in 2010 has not been enough to support the estimated number of new entrants into the labor market each month (needed to keep the economic recovery moving forward).  Just consider: In May, 2 years after the official end to the recession, about 14 million people were still out of work that were actively looking for work, compared to about 9 million people (on average) in 2008.  This means in the coming months, if you are looking for work you may have higher competition for those mainstream jobs.  If your dream is to work for local government, you may be waiting a little while, especially if you do not have a college degree. 

Friday’s employment numbers also may shed some light on why we’ve been seeing more teenage finalists than usual on American Idol – because they aren’t able to find alternative work!  The data shows that almost 25% of teenagers (aged 16-19) looking for work can’t find work, and a deeper look into the numbers reveals a staggering 40% of African American teens are unemployed.  Further, only 33% of all teenagers are counted as “in the labor force” (either have a job or are looking for a job).  That means over 11 million American teenagers are not earning money, nor are they actively looking to.   Perhaps teenagers, typically associated with doing “odd jobs” for money, should take this potential work more seriously (it’s not like there’s anything on TV over the summer so there’s no time like the present to get a move on it).  Besides, what is the alternative (illegal jobs don’t count, sorry)?  Much to our dismay, being featured on Maury, or Jerry, or Judge Judy does not count as being productive members of society.

The lack of a recovery in the “mainstream” jobs we’ve been relying upon would seem to indicate it is time for all of us to put our thinking caps on to invent new jobs for the future.  Teenagers are in an especially good position to be working toward having an “odd” future.  After all, what now might be considered “odd jobs” may just be the key to our economic recovery!  In other words, dare to be “odd.”
(Bureau of Labor Statistics, National Bureau of Economic Research, oddjobnation.com)

Thursday, June 2, 2011

What's for Dinner?

The one question on everyone’s mind by the time 4:30 rolls around:  What’s for dinner?  In the early stages of this big decision, we are very ambitious (the world is your oyster).  We are determined to eat healthy (after reading the constant stream of news articles on food, like “this dinner idea really is healthy, delicious, fast, and easy”, “the dinner Halle Berry swears by”, and of course, “eating more pizza and chips will kill you”).  By 6:00 our appetite is beginning to make itself known and chicken with raw vegetables is sounding less appealing (more like torture).  We feel duped for falling for (what we tell ourselves is) “the media guilt trip” – what makes these people the experts anyway.   On our way home we pass a Pizza Hut, or worse, a city hot dog vendor.  We think about how we just worked for 8 hours and deserve something better than Lean Cuisine.  By 8:00 we still haven’t had dinner, and at this point our hunger is so overwhelming our natural instincts kick in.  We just want food.  And lots of it.  And preferably with taste (salty, perhaps).  We scour though our fridge (nope), our cabinets (better luck next time), and finally “make the call” to Papa Johns.  But at the last moment we have a distant memory of 4:30 – we tell the pizza maker to go ahead and put peppers and onions on that.  Vegetables make it okay, right?

Long gone are the days where we were able to “shop around” friends’ houses for dinner, as in those Stove Top commercials.  Our choices back then were much more limited, making the decision less of a life altering situation (as in “Beef, it’s what’s for dinner”).   As if our voices were heard, today the Department of Agriculture and the First Lady may have just made our lives a little easier.  They unveiled the new “food pyramid” which is now a “food plate”.  We know our way around a plate!  The message is clear: simply follow the formula set out on the plate and we will be on our way to better, healthier, more fulfilling lives.

This could be an opportunity for our fellow plate manufacturers to make a whole new product.  And the timing is great: Data released today indicates plate manufacturers could use a good opportunity.  New factory orders for “durable” goods (includes non-disposable plates) fell by 3.6% in April over March, worth $7.1 billion, following a 4.6% increase in March over February.  More specifically, new orders for furniture and related products, where non-disposable plates fall in, decreased by 3.3% in April (equivalent to almost $200 million) after increasing by 7.5% in March and 0.7% in February.  A new source of business is welcome.

The market for a new plate is there – in 2009 (in the height of recession) we spent $47 billion on “glassware, tableware, and utensils.”  That is no small chunk of change.  Manufacturers could market it as the “eat great, lose weight food plate, USDA approved” and we could be convinced to buy the plate as an investment.  If we spend $10 on this plate, not only would we be encouraged to eat better (and make our dinner decision that much easier), but being healthier could help us save money otherwise spent on healthcare in the long-run (healthcare costs/spending = big mess).  If we all did this, imagine how much we could save for other items we actually want and help the economy by reducing government healthcare-related debt (of which there is a lot).  This could really go somewhere.

The plate itself has four compartments with an extension.  We’ve seen lots of compartmentalized plates, but this is different – this is special.  Pyramid plates were doomed for failure.  But before we can run out to buy these special plates there is one item that must first be fixed (I mean, corrected): the (very noticeably missing) extension.  The creators must have been so focused on the plate itself they forgot the other Mickey Mouse ear that certainly was intended for the “dessert” portion of our well-balanced diet.  Plus we like symmetry (and Mickey Mouse).  Who knew a compartmentalized Mickey Mouse plate would be so fun for everyone?

(Census Bureau, Bureau of Economic Analysis)