At certain times of the day, you may notice less people out on the roads and less people in restaurants. Gas prices are reaching four dollars a gallon and the American dollar just doesn’t seem to be going as far as it use to.
Robert McNeill, 19, says he’s had to quit a lot of his hobbies because it was getting to expensive. He doesn’t eat out much, though sometimes he does when he is at work. He mainly tries to eat what he has at home and what his parents provide him with.
Even places like movie theaters are feeling the effects of a slowing economy.
Courtney Graves, a movie theater employee, says she has noticed a definite decrease in movie attendance. She says this means the employees get less hours, since the theater isn’t making as much. She feels the entertainment industry is definitely being effected by the slowing economy.
I did talk to one man who has been able to stay ahead of the slowing economy, Larry Dauge, owner of ScubaToys.com and GatSplat Enterprises.
Dauge says that since the American dollar is so weak now, he can easily get scuba business from other nations, like Australia. However, he says most paintball suppliers are Canadian and since the American dollar is on par with the Canadian dollar, he has noticed a price increase in paintball supplies by 20 percent.
So with summer approaching, people should just save their money, maybe get back to nature and wait out this “possible” recession.
Big entertainment companies are feeling the hit from the “possible recession.” Consumers aren’t as quick to spend their money on the entertainment industry. Movie ticket prices are up and cable bills are topping $100 a month. Many companies rely on DVD sales, which are declining when it may be cheaper to just rent the movie.
Goldman Sachs just cut it’s stock targets for the entertainment industry by 10% to better reflect the upcoming recession.
The companies taking the hardest hits are CBS, Disney, and Viacom. All these companies rely heavily on ad revenue.
Bernstein analyst Michael Nathanson says Disney could see a 12.3% drag on earnings since the majority of the revenue comes from advertising and theme park sales. Even though it’s fiscal first quarter earnings showed no decrease.
Other companies like NBC universal has helped it’s business by branching out to nations all over the world. So it may thrive in nations with a thriving economy.
In the entertainment industry it may just come down to where the companies bring in the most revenue.
It all depends where their money lies.
For some people, going out to eat and to the movies just isn’t in the picture any more. The job market is down and people are losing their jobs. The housing market is down as well, people can’t sell their houses.
CNN told the story of a single mother who lost her $70,000 a year job in February. Patricia Guerrero has been doing everything possible to support her two children and pay the bills.
She gets unemployment checks, but that isn’t enough.
She found herself going to food bank, something she never thought she would do. She also applied for food stamps, but was turned down.
“I never used the system. I’ve been working since I was 15-and-a-half. I needed it now and it turned me down,” Guerrero said.
Daryl Brock, executive director of Second Harvest Food Banks in California said they’ve noticed a change in the type of people that come in.
The poor economy is now taking on the middle class.
The Labor Department has reported that 80,000 jobs were lost in the month of March, and the unemployment rate is high.
The report also said that 76,000 jobs were lost in January and February. It is now estimated that 232,000 jobs were lost in the first three months of the year.
The unemployment rate has risen from 4.8% in February to 5.1%, the highest since Hurricane Katrina.
A household survey showed that 434,000 people are without jobs, the biggest amount since right after 9/11.
Some economist predict jobs will be cut through August, while others predict the job cuts will continue through next year.
Some experts are assuring us that this isn’t as bad compared to historic losses.
“So far the job strength has held up consumer spending when there’s been a lot of other bad news,” said Tig Gilliam, CEO of Adecco Group North America, “If we have serious job deterioration in the job market, that could feed into problems. But as long as we’re at 5.1% unemployment, or even 5.5%, I don’t think that should drive a consumer spending halt.”
While some companies are hurting, others are thriving.
Several airlines have had to close their doors, but the railroad business is benefiting. They are more cost efficient, more fuel efficient.
Consumers, mainly businesses, have been turning to them for transportation needs as opposed to package carriers.
Although it hasn’t been officially admitted, our economy may be in a recession (Ben Bernanke, Federal Reserve chairman, has said “a recession is possible.”) But many investors are already looking at recovery.
Wall Street is still seeing a good market, because with the evidence from the railroad industry, as well as the homebuilding market, investors are waiting for the economic rebound.
Even with this positive outlook, people are still worried how this will fair with more job losses, a poorer housing market, and rising gas prices.
