The economy in four acts

The economy is beyond the means of mortal people to understand, which doesn’t prevent me from trying.

Let’s take a look, for example, of this morning’s economic reporting, in the order I consumed. it.

Act 1: I heard this on Marketplace last evening….


Right now about 75 percent of companies have reported, and we’re on pace to have record earnings. You know, that beats 2007, when the earnings were all phony banking profits.

Act 2: Unemployment dips in sign of improved job market


The number of people seeking unemployment benefits dipped last week, a sign the job market may be improving slowly.

Sweet.

Act 3: Target reported its earnings this morning. Phil Picardi reported on them as I drove in this monring…


Minneapolis-based Target says a key sales figure rose more than 4 percent last month as shoppers bought groceries and health and beauty products. Target says overall sales for the four-week period climbed 6 percent from the same quarter last year to 4-point-8 billion dollars.

Six percent? That’s great, right?

Over to you, Wall Street. Bring it on home!

Act 4:

markets_1042_aug_4_2011_2.jpg

markets_1102_aug_4_2011.jpg

Ruh roh.

  • http://ofbuckleyandbeatles.wordpress.com/ Drae

    How come everything has a strike line running through it?

  • jeff

    I think there is an element of truth to what you said yesterday with Mary at 4:20 — the more people hear that a recession might be coming, the more they are less likely to spend (which helps bring on a recession). What’s interesting is that even though the good news, as well as the bad predictions, are reported, it is the bad reporting that seems to affect people more.

  • http://linkert.name gml4

    Oh man! I haven’t seen a missed closed tag error in years! You totally made my day Bob!

    BTW – Wall Street sucks.

  • Bob Collins

    //How come everything has a strike line running through it?

    (a) Coding error.

    (b) Whenever another year of my retirement disappears from the portfolio, another sentence on News Cut gets crossed out.

    It’s one of those.

  • http://linkert.name gml4

    Oh man! I haven’t seen a missed closed tag error in years! You totally made my day Bob!

    BTW – Wall Street sucks.

  • http://ofbuckleyandbeatles.wordpress.com/ Drae

    Act 1 – I could be mistaken, but I believe “earnings” are not the same as “profits.” I think it’s akin to “gross” vs. “net.”

    Act 2 – the number of people seeking unemployment benefits may have gone down due to increased employment, or it may be more people have fallen from the rolls because their benefits have ended.

    Act 3 – Have Target’s sales numbers increased because of increased prices? That 6% is only a good number in context, which we don’t have. Again – I think it’s the difference between “earnings” and “profits.”

    Act 4 – the daily beatings will continue until morale improves.

  • Jon

    If Target is assumed by many to have lower grocery prices, a growth in their food sales may also indicate more people are leaving other stores and buying their basic foods at Target. So it is conceivable that good news for Target may actually indicate bad news for the economy.

  • JackU

    @Jon: Have you ever shopped Target for groceries? They may be cheaper than a small independent grocery store and the upscale supermarket (ex Kowalskis, Lunds/Byerlys), but I don’t think they are cheaper than the big discount supermarkets. (ex Cub, Rainbow)

    Personally I would see an increase in grocery sales at Target and indication of “trip reduction” caused by increased gas prices. People are more likely to go someplace then can do all their shopping in one trip to save on gas.

  • http://ofbuckleyandbeatles.wordpress.com/ Drae

    @ Jon & JackU – Target’s prices are competitive with Rainbow & Cub. I know, because I’ve priced them all. Where you can save w/Target though is the health/beauty products. On that point, I agree w/JackU’s analysis.

    What concerns me about Target’s growth is it came from consumers purchasing necessities and not from, say, electronics or domestics.

    And I’m still concerned with increased prices. It may be that I’m spending more, but I’m buying less. The $3 increase in my tub of coffee is going to prevent that impulse buy at checkout.

  • lucy

    Nice comparison Bob : )

    This reminds me of a 5 hour play I was invited to in my early 20’s where the setting took place in Morrocco. I made it through to half time, having no idea of what I just watched.

    Same thing here. Good acting but I still do not understand the content and the outcome.. Sometimes I think the script writers count on that.