So Yesterday

Malls are so last season.  Well, almost.  If you’ve ever decided the joy of going to the local mall (especially on weekends and holidays) was too much excitement to handle, and instead decided to buy online, you’re not alone.  We have a million things to do, and only 24 hours in a day (its not like we want to go to work, but we have to earn money somehow).  We do want the latest fashion, shoes, movies, books, and whatever else QVC has to offer (Jack LaLane power juicer?), but isn’t there a better way we can multi-task these time consuming purchases into our day?  It’s an honest question.  We have the demand, retailers have the supply, and it is in everyone’s best interest to have the most efficient exchange possible.

Enter online shopping.  It’s easy and addictive.  If you are reading this blog and have never bought anything online you have not been efficiently spending your time (reading this blog is a good first step).  Online shopping has become analogous to “brick and mortar” shopping (actual stores we go to), from offering boutique items (there are websites that sell your favorite celebrity looks) to the “big-box” mass retailers online (where would we be without Amazon).  For many retailers, online and physical stores are interchangeable (who doesn’t love when you can buy online and pick-up right in your local store to save time and shipping).  We can see what’s in stock and what the latest sales are before we go to the store (imagine the day when it will be old-school to go to the store to “try it on” in lieu of digital “try-ons”). 

Online shopping has become part of our everyday life.  Data released today shows 4.5% of all retail purchases Americans made during the first 3 months of this year were online.  This is up 0.4% over the same period last year.  Online sales even grew as a share of total retail purchases even through the 2008-09 recession, and forecasters believe online purchases as a share of total retail sales will reach 8%, or $248.7 billion, by 2014. 

Retailers are taking notice.  This is not new.  What is new is how retailers are finding new ways to reach us (they realized we have places to go and people to see).  In other words, they are going mobile and our habits are leading the way.  According to a 2011 survey of 68 retailers, 91% of retailers have or are developing a mobile outreach strategy, for example 35% of retailers have iPhone apps and 15% have Android and iPad apps.  Retailers have also realized how near and dear social networking sites are and 62% of retailers are investing in ways to facilitate online purchases through places like Facebook.

Our love of being constantly connected can be a win-win all around – our favorite smartphones and social websites are allowing us to be more efficient consumers and are allowing retailers to target us more effectively (the ultimate spyware).  We don’t have time to waste waiting in line (hello, isn’t American Idol down to only three contestants?).  After all, time is money, and we like money. 

(Census Bureau, Forrester Research, National Retail Federation)

Just Can't Get Enough

Congratulations, we’ve done it again.  Just when we thought we had enough, we realized that was nonsense.  All the naysayers should have known Americans aren’t quitters!  To fill you in:  (and perhaps you’ve already blocked this from your memory) Back in bleaker times (far away in 2008 & 2009) some of us realized we had more debt than we could repay.  Our bank accounts were not feeling good (neither were the banks maintaining them, but they too may suffer from “select amnesia”).  Everywhere we went, we were constantly threatened with the “s-word” – save (*gasp*).   It was like a bad penny, constantly turning up.  And we were conflicted:  If we had to cut back our spending, how could we show the ones we love the most (ourselves) how much we care? Given how heavily our economy – our communities – relies on our everyday “retail” spending (about 33% of our annual economic output), how could we let our friends down?

Don’t worry, this trend didn’t last long (why should we have to exercise restraint? Don’t they know who we are?). It was certainly rocky for a while, but by late 2009 we were getting back on track (we all felt it; even Britney fell off the train and had to get back on again).   By “back on track” I mean spending more each month on retail purchases than we were the month before.  Certainly some of this had to do with natural price increases.  And certainly (much to our dismay) we have exercised some restraint and began saving more (we are now saving 5% of our income compared with the 2% average for most of the 2000’s).

Data released yesterday should let you continue to sigh your sigh of relief.  We can even say with a high level of confidence that the “real” (albeit mostly divorced) Housewives of Bravo network will have something to do tomorrow – shop and go tanning of course (now we can sleep soundly).  In April our spending on retail items increased at an annual rate of 7.6% (over the year before), and April retail spending was up 0.5% of March.  In fact, April is the 17th consecutive month that we have spent more money year over year ("retail expenditures" has increased).  In other words, we are back in the driver's seat, watch out. 

So what did we spend more money on in April?  Mostly gasoline for our cars (see previous post).  Other than gas, we enjoyed more food and drinks (good choice).  We also spent more money over the internet (working hard, are we?).  Hard as it is to believe, we also spent less money last month on a few items: electronics (saving up for the iPad2, nice) and on “books” (whatever those are).   

When is enough spending enough?  Never (trick question)!   Even the Black Eyed Peas know we just can’t get enough.  And now so do you.

(Census Bureau, Bureau of Economic Analysis)

This just in: Hitchhiking back in style

(Originally posted 5/11/11 but Blogger.com had an error)

We all follow the latest styles and trends (as responsible citizens of course). Who doesn’t want the newest hot item if it has the potential to make us happier, better people? Knowing what items make life easier is especially helpful when it comes time to get those gifts we’ve been putting off getting because we didn’t know what to get (don’t deny it). If you ever want to know what is “in demand” at the moment, there is a guide that is easy and free. Save your money for the US Weekly Royal Wedding issue (on stands now for just $9.99). By “guide”, I mean your local radio station (if your boss is around, claim you are conducting “market research”). What is your favorite station giving away today?

Mine is giving away “cash for gas” cards. Upon reflection this makes perfect sense. Gas prices everywhere are through the roof, and these prices are probably not going down anytime soon. As noted in a recent Economist piece (a.k.a. “the Bible”) our country has lower taxes on gasoline than pretty much every other developed country, signaling the limited room for government intervention (if anything the article makes the case to increase taxes). In other words, move over Ryan Seacrest (and your complete takeover of daytime radio), DJ Toby is the new genius. Gas gift cards are a great gift idea for pretty much everyone.

Further evidence of this gift being a great idea is in the numbers: figures released today show that in March the U.S. bought $31.3 billion (with a “b”) more in petroleum (the stuff we need for gasoline) from other countries than they did from us. This gap is about $6 billion higher than it was in February. This means we have a biig debt with other countries (called "trade deficit") that is accruing over time, especially with petroleum producing countries, that we are going to have to pay back (and probably with interest). Further affecting the amount of this debt are the ever increasing prices we have to pay for petroleum.  According to estimates released yesterday, import prices for petroleum increased by 7.2% in April over March, and 37% over the past year!  Yikes. 

Let's face facts, even though there is a lot of economic work out there that makes a compelling argument against forced holiday gifts, instead suggesting that we give gifts as we see stuff the recipient would like (perhaps for such silly occasions as “no reason”), the reality is our loved ones (us included, don’t deny it) expect gifts on those forced holidays. You cannot show up to your friend’s wedding empty handed (that’s like a “go directly to jail, do not pass go” card).   When that time comes, you can stand ready.  Just do the math: More oil imports + higher prices + our reliance on cars = get that gas gift card for your special someone.  It pays to do that “market research.”

(Bureau of Economic Analysis, Bureau of Labor Statistics, The Economist)

When I Grow Up...

“I want to be famous, I want to be a star, I want to be in movies” (a classic ‘oldie but goodie’ by the Pussycat Dolls).  This goal is pretty ambitious and may take some effort (not to be confused with its cousin, talent).  The reality is most of us don’t take the famous route (now we have to be able to “sing” AND “dance”?  That seems unreasonable.).  For some of us, just accepting the fact that we have to grow up is enough to deal with.  But at some point we all come to the realization that it’s time to get a job (even Kendra Wilkinson realized it was time).  Maybe it’s when we open our refrigerators and see an empty oblivion, or maybe it’s when we want to impress someone and realize still “living with the folks” isn’t quite cutting it.  Test: Is your mom still packing your lunch?

The job market is a big place and there are many possibilities to choose from.  Did you know there are over 900 possible occupations in the Government’s classification system?  Not only is it a challenge to figure out what job allows you to make money doing something you like (and is legal), but then you actually need to get yourself out there and get said job.  Unfortunately, there is no ‘easy button’ for this one.

So, of all the economic data on the news, understanding the jobs market is worth your time (don’t worry, its Friday, DWTS isn’t on tonight).  The fact is we all know someone who is looking for work, or looking to switch jobs, (maybe it’s you, I won’t tell your boss).  Information is available that can help you understand what industries are hiring right now, and where the jobs are at (more on the geographical distribution of jobs another time).  Jobs data released today shows the U.S. added 244,000 jobs in April, with the private sector adding 268,000 (that is encouraging news if you are looking for work).  The Federal Government, on the other hand, shed 24,000 jobs (anyone who’s been to USAJobs in the last few months can attest to slim pickings on the Federal level).  Digging a little deeper reveals some insight.  Many of these increases were in “professional & business services” (think legal and finance), retail, “leisure and hospitality” (think hotels), and healthcare.  Leisure and hospitality may be more seasonal for the summer.  Healthcare is not going anywhere any time soon (we have a lot of old people in this country – hey, side note: What do you think the chances of Betty White appearing on DWTS are?). 

There’s no disagreement that it’s work to get work.  Sometimes we even take a few months off from looking for work because we get discouraged (called “exiting the labor force”).  Last month, some of us who had exited the labor force came back (now that jobs are coming back).  This was what was behind the unemployment rate (percent of people in the labor force who have no job and are applying to jobs) rising from 8.8% to 9.0%.  Believe it or not, this is good news in the long-term (unless Cops is your favorite show).  We all grow up one day – though maybe we should at least wait until after the weekend.  Happy Friday!

(Bureau of Labor Statistics)

Relax, its Cinco de Mayo!

It’s a great time of year; the weather is finally starting to cooperate.   What better way to end a long day than being able to sit outside and enjoy a nice cool drink.  Wouldn’t it be great if we had a really good excuse to sit around and do nothing all day, like they do in Spain with their long lunch siestas?  If we could actually live by the epic mantra of Bruno Mars’ “The Lazy Song?”  Look no further, today is Cinco de Mayo, a fantastic (U.S.-borrowed-from-Mexico-as-an-excuse-to-do-nothing) holiday where we can sit back, have a beer (or Margarita for you more sophisticated types) and do what we love doing best – nothing.

Sitting around and doing nothing may be fun, but it is unfortunately not sustainable for long periods of time (even unemployment runs out eventually, nice try).  Contrary to our wildest dreams (or to what people who appear on Judge Judy may believe), money does not grow on trees.   We have to make a living to support ourselves (at the very least, buy drinks to be lazy comfortably) and keep our communities successfully functioning.  If we didn’t work (i.e., produce goods or provide services that generate value) our country would cease to function.  We wouldn’t have any money to buy necessities or provide for our families (or to pay for your unemployment checks).  Our quality of living would decline dramatically (that is a bad thing).

So, while being lazy isn’t great for our wallets, sometimes we just can’t help it.  Just how lazy are we?  Not very, according to one measure.  Nationally, the average worker is generating more value in their job over time (maybe we are worried for our jobs and want to be invaluable, or maybe there is a new technology that lets us do more than we used to in a workday), a trend that has continued for every quarter (3 month period) on a year over year basis for the last 2 years.  According to data released today, we were 1.3% more “productive” in the first 3 months of this year compared to the same time last year, and 1.6% more “productive” than in the last 3 months of 2010.  “Productivity” measures how much value (“output”) people generate for every hour worked. 

You may interpret this to be another excuse to be lazy – after all we are creating more value working the same number of hours compared to last year so why not work a little less and call it even.  Actually we already have to some extent.  The rate at which we are increasing our productivity is less this year than last year – meaning our productivity in the first 3 months of 2010 was 7% higher in 2010 than in 2009, compared to 1.3% higher in the first 3 months of 2011 over 2010.  Plus there are real benefits to being a more efficient worker.  Generating more value with the same resources keeps costs (and prices) down and it helps us stay competitive with the rest of the world – the more value we create the better off we are.  Just look at what happened to Spain (in case you missed it, they aren’t doing so well).    Now they are doing away with the siesta to require a full work day (sad, I know). 

In other words, we’ve worked hard and we’ve earned that beer (or margarita) we plan to sit outside and enjoy this evening.  But let’s be sure to keep up the good work.  Feliz Cinco de Mayo! 

(Bureau of Labor Statistics)

"Fast Five"...Hundred

Apparently, there is something about the never ending “The Fast and the Furious” franchise that keeps us interested (the first one came out 10 years ago, normally we don’t have that type of attention span).  According to “the man Stephen Colbert says is the greatest man in America” (Stephen Colbert), “Fast Five” opened to the largest box office weekend in April ever.  Why?  It could have something to do with Paul Walker or Vin Diesel (or Jordana Brewster).  It could also have something to do with our love of stuff we can’t afford and isn’t practical, like fast sport cars – especially the kind that have a lot of horsepower, short turning radius, and can miraculously come out of a dangerous, nerve-wracking car chases relatively unscratched (sport cars defy nature!). 

Who are we kidding, we love cars of all shapes and sizes.  Disney made a movie just about cars (aptly called “Cars”) and we loved it.   And you know when Disney gets involved it’s pretty serious (“Cars2” is coming out soon).   Disney’s Hollywood Studios even has an “Extreme Stunt Show” devoted to the depiction of a speeding car chase sequence seen in movies. 

Just like most things, our love of cars – new, used, U.S., or international – can be measured.  Data released late yesterday shows in April Americans bought cars and utility trucks (“light vehicles”) at an annual rate of 13.2 million vehicles per month.  This is up 17% from the annual rate last April (11.3 million vehicles per month), meaning Americans have bought more cars over the last year (a further sign the economic recovery is taking hold, good news).  In fact, our spending (“personal consumption expenditures”) on motor vehicles and parts was 17% more during the first 3 months of this year than in the same period last year, after adjusting for price changes, compared to a 2.8% spending increase for all goods and services. 

Our purchasing habits also reveal Americans buy more U.S. made vehicles than foreign made, by a large margin.  Of the 13.2 million vehicles sold last month, 10.1 million were U.S. made.  Further, of the U.S. made vehicles, Americans prefer trucks to cars.  Over the last year, trucks made up between 52% - 60% of all U.S. made vehicles sold each month.  Data on our spending patterns complements this: “real” spending (after adjusting for price inflation) on new trucks overtook new cars in 1997, and real spending on used trucks overtook used cars in 2002 (yes, trucks can cost more).  As 80% of all truck purchases in the last year were U.S. made, it seems that if Americans are going truck they go American (must be those Dennis Leary Ford commercials). 

So we shouldn’t be surprised if the next car-themed movie or speed chase video game is truck-themed.   Maybe the sixth installment of “The Fast” franchise will be “the Bigger and the Furious” (and bigger is better).  Perhaps the “Cars” franchise can live on, with the third installment aptly named “Trucks”.  That may keep our attention.

(Auto manufacturers and Autodata Corporation, Commerce Dept., Stephen Colbert, IMDB)

A Few of Our Favorite Things

I’m not talking about American Idol or Glee (or Ryan Seacrest).  Think bigger.  (No, not Oprah.)  Things we simply cannot do without.   The lifelines I refer to are our phones and computers.  Many of us do not leave home without them.  How could we keep up with life if we cannot keep up with the Kardashians?  What life lessons can Snooki teach us?  How could we be valuable and productive members of society if we were not able to process 1,000,000 new YouTube videos per minute (or process this blog)?

What we don’t typically think about is where these items (and other “manufactured goods”) come from, or maybe we assume everything is “made in China.”  Unless you live in a cave with no clothes (or processed food, that would be a shame) your sharp observation skills have probably alerted you to the fact that the stuff we buy comes from all over the world.  Just look at pretty much any clothing tag, or the popularity of your neighborhood IKEA.  You may even believe U.S. manufacturing is dying since 1/3 of all manufacturing jobs have disappeared over the last 10 years.  

Then you’ll be surprised to hear the U.S. manufacturing sector is alive and doing rather well – especially in computers and electronics products (types of “durable goods” that include our prized iPads and Smartphones).   A measure for understanding the health of the manufacturing sector released today (called the “ISM Purchase Manager Index”) shows the manufacturing sector continued to grow in April for the 21^st consecutive month.   This measure incorporates information on employment, production, new orders, supplier deliveries, and inventories as surveyed by 300 U.S. manufacturers.  

Now you might be thinking this blogger has no clue what is going on because you just took out your phone and saw that it was not “made” in the U.S.  But what we don’t see is where all of the components that go into our essential gadgets come from.  Just because our phone was finished in another country doesn’t mean the value of the phone (the technology) was generated and manufactured in that country.  The iPhone is a good example (your “Hello Kitty” wallet is a bad example).   U.S. manufacturing is doing well because of its ability to focus on making what its good at (“comparative advantage”) and because it finds new ways to produce more with the same or less resources.  Research shows that China was the world’s largest goods manufacturer in 2010, and the U.S. followed close behind (19.8% of the world’s share vs. 19.4%).    Yet China employs 100 million workers compared to our 11.5 million – meaning the U.S. manufacturing sector is able to generate 8 times as value per worker than China.  

And it turns out the industry that allows us to know what Kim, Kourtney, and Khloe (and Lamar) did today (computer and electronic products) added value to our economy at an increasing rate despite the recession.   This bodes well for us excited about the next iPad or iPhone version 10.0.  At this rate, we will be able to read what Kim did, view the new Britney video, and play “Angry Birds” simultaneously.  It only gets better!  

(Commerce Dept. (BEA), Bureau of Labor Statistics, Institute for Supply Management, International Centre for Trade & Sustainable Development)