Earlier today, economists and others who believe the seemingly drug-induced pseudo-reality spewed out each month by various government agencies finally learned what visitors to Financial Armageddon and a select group of other individuals have known for many months: the economy is heading south, most likely in a big way.
According to a Reuters report, "Economy Contracts as Consumers Retreat," the U.S. economy "suffered its sharpest contraction in seven years in the third quarter as consumers cut spending and businesses reduced investment at the onset of what may be a severe and long-lasting recession."
Reuters added -- in what was probably a big suprise to TV pundits and other delusionalists who haven't quite figured out that the once unstoppable American consumer is now history -- that "consumer spending, which fuels two-thirds of U.S. economic activity, fell at a 3.1 percent rate in the third quarter -- the first drop since the closing quarter of 1991. Spending on nondurable goods -- items like food and paper products -- shrank at the sharpest rate since late 1950."
Still -- in what might be seen as an ironic twist -- I wonder if over the the next few days or so, the strategists, commentators and Bush Administration apologists who have been harping on about how good the "data" has been been up until now will suddenly change sides and start to question whether we are getting the real scoop about "the greatest story never told" from official statistics.
If that happens, it might be worthwhile -- though, in reality, probably not -- sending these lost souls links to reports about today's economy that might prevent them from completely losing their grip on reality. Below is a sample of recent stories that appear to fit the bill:
"The Wal-Mart Theft Index: How to Tell if We’re in a Depression" (Nashville Scene's Pith In the Wind blog):
While cable pundits and newspaper eggheads debate whether we’re technically in a recession, there’s an easier way to decide the issue. It’s called the Wal-Mart Theft Index.
The nation’s largest employer and retailer is a bellwether for many things, but theft may be its greatest contribution. Due to the sheer size of its stores – coupled with chronic short-staffing and no security staff – Wal-Mart tends to be ground-zero for shoplifting.
The evidence comes from the discarded packaging found in the deeper reaches of the stores. In normal times, shoplifters will grab CDs, DVDs, and smaller electronics items, strip them of packaging in the quieter aisles, then walk through security scanners undetected.
But over the past few months, workers are discovering that even thieves are having a hard go of it during this wretched economy. “Now I'm finding lots of things like food, diapers, tampons, over-the-counter pharmacy stuff like kid's cough medicine and insulin,” says one employee. “They still steal all of the other stuff, but I'm seeing more necessity items these days. Today I found that someone stole a queen-sized electric blanket and a package of condoms. Now I have the peace of mind knowing that our customers won't get cold while they're having protected sex.”
Which begs the question: Should Congress consider a stimulus package for shoplifters?
"Beauty Salons Out of Style as Clients Cut Hair Budgets" (Los Angeles Times):
To treat tresses for less, many opt for discount chains and dye-it-yourself products.
With stock portfolios in the toilet, layoffs looming everywhere and credit hard to come by, many folks are looking for places to cut back.
That includes their own heads.
Consumers are slashing their budgets by skipping visits to upscale hair salons and opting for inexpensive stylists. Some are getting haircuts less often or dyeing their own locks at home.
"I'd rather not be pampering myself right now," said Melissa Moats, a Studio City voice-over artist who decided to color her own hair with a $20 bottle from Target rather than pay the usual $120 for a cut and color at the salon. She then went to Supercuts for a $15 trim.
Things are fine in the voice-over business right now, she said, but she figured it would be good to save. "All of us -- no matter what we do -- are looking at ways to cut back."
Beauty products behemoth Procter & Gamble Co. on Wednesday reported a 20% gain in sales of home hair coloring product Nice-n-Easy in its fiscal first quarter, and double-digit sales growth for its Head & Shoulders brand. Meanwhile, its Professional Hair Care line saw a small drop in sales.
Consumers' move toward cheaper products is showing up in the bottom lines of companies that might be expected to benefit from a trend toward penny-pinching.
Regis Corp., which owns Cost Cutters, Supercuts and Sassoon Salon, last week posted a 30% drop in quarterly profit compared with a year ago.
Daniel Hofkin, an analyst at brokerage William Blair & Co.
