Wednesday, August 3, 2011
Every party has one (you know who you are). It’s that guy who has way too much to drink, or that girl who is so easy she makes pressing “The Easy Button” look hard (Campus PD also falls in the “party pooper” category). What’s wrong with wanting to have some fun? It is the middle of summer after all. Why not live a little?
One reason: money. It’s always about the Benjamins and apparently they aren’t free (nor do they grow on trees). Not even banks are giving them out anymore. Does this mean we will be stuck to our couches (literally) for the rest of the summer, forced to watch reruns of NCIS and The Office?
Hopefully not. According to data on income and spending released yesterday, there may just be beach weeks for everyone this summer (even you, if you haven’t left already). In June, the amount of spending money we had after taxes and after adjusting for price increases (“real personal disposable income”) increased by 0.3% over May. This is the largest monthly gain so far this year, due largely to the summer break gas prices also appear to have taken. And our recent spending restraint gives us some wiggle room to take that beach week if we so choose: “real” spending (after adjusting for prices) was flat in June, and May and April saw 0.1% declines. Given the hiatus in gas prices that has given us more in our wallets may end as quickly as the summer sun, we might want to get on that plane/train/automobile before it leaves the station.
As if we needed more motivation to take that last minute summer trip, economic data released last week shows consumer confidence is up slightly in July (to 59.5 from 58.5 in June – anything above “50” is positive, although “80” is the threshold for strong optimism), thanks again to the summer vacation taken by gas prices and people seeing the money available for summer spending on the rise (jobs are another story). In other words, what are we waiting for? Even if you’ve already taken that summer vacation, go ahead and take that sick day and head to the beach!
While you’re at the beach, getting your suntan on, we can also be productive, responsible citizens. Data released Monday shows the economy needs our help, even while we are away from our desks. A monthly measure of how the manufacturing sector is doing (“ISM Manufacturing Index”) came in at a 2 year low in July (at 50.9 the sector is barely growing), well below expectations and the lowest since the economic recovery began. New orders and backlog orders actually decreased in July over June, not a good sign for the economy for future months. Perhaps we can make sandcastles, and sell them to unknowing foreign tourists, would that help? Maybe. We could also set up more beach vendors to sell US made beach stuff (or not even beach stuff, like cigars or “I Love USA” goodies). If other countries can do this on their beaches, why can’t we? Our wallets will thank us later, just in time for next year’s beach week! No party poopers left behind.
(Bureau of Economic Analysis, The Conference Board, Institute for Supply Management)