Economy Outlook - April 2008

I get the weekend paper and watch the news just about every day. There hasn’t been much but bad news about the economy lately. It’s pretty obvious we are in another recession, but how long will the recession of 2008 last and how bad will it get?

There has been four airlines that have either filed for bankruptcy or bankruptcy protection in the past 2 weeks. 3/31 - Aloha Airlines, 4/2 - ATA Airlines, 4/7 Skybus Airlines, 4/11 Frontier Airlines. Champion Airlines has announced that it will be ceasing operations on 5/31. From the articles I have read - these companies could not overcome to the rise in gas prices.

In the local newspaper it shows the national unemployment rate has shot up to 5.1% - 80,000 jobs were cut in March alone and just barely past the first quarter of the year, we are nearing a quarter-million jobs lost so far this year. Many different businesses were hit, such as construction and real estate firms and mortgage brokers (due directly to the housing market crisis), legal services, airlines, temporary agencies and more.

Another article I found interesting, polled 803 phone-based interviews between March 29th and April 1st. Five economic issues were asked to the people polled, two of which were of most concern - Cost of Gas and Cost of Health Insurance. The other three economic issues - Amount of Taxes You Pay, Housing Slowdown and Ability To Find Or Keep A Good Job - were also clearly issues.

You may be interested to read my article from earlier in the week [Gas Up $6 A Tank In 1 Week?] ‘The Walmart Effect’ may also be one negative for our economic issue, as touched on in my previous article. This effect relates to the airlines because the airlines tried to compete by having the lowest air fares. It may not be well accepted by all people, but I believe it is good to buy the next step up, do it right the first time…If you can buy an item for $5, buy the $8 item. It’s not much more, but the quality is usually better and will last longer than the $5 item - so not only will you get more life out of it but you will have less headache from having to replace the item sooner and spending more in the end. Do it right the first time. It will also help the economy. The highest cost is creating the initial product, using the higher quality materials only increases the production prices slightly - as retail usually works, the price of the item not only goes up due to higher production costs, but it usually has a higher profit margin, thus helping the economy - and indirectly, you.

Amongst the mess of negative news floating around, there tends to always be the strong areas such as government jobs, hospitals and health-care - which increased employment in the past months, as well as educational services, day-care providers, insurance companies and bars and restaurants. I understand why employment at bars has gone up with the economy the way it has been (sad but true), but I would have figured restaurants would have declined - dining out tends to be expensive and I figured people would be not going out as much at a time like this.

Education seems to be a platform that can help you have job security, I see that more and more everyday. For example, if the department at the company you work for is transitioning out, if you have a good work record, education AND show you are willing to learn, most employers will try to find another position within the company if it is available. Learning is not only a good way to help cement opportunities now but also for the future. I think in the coming months colleges and universities will be seeing an increase, even more than the trend has been in past years, of enrollment, due to people educating themselves to move into a new work field or just giving themselves an advantage in the work place.