THE BACK PAGE: Cautiously optimistic
This is a modest recovery and we aren’t going to party like it’s 2007 again anytime soon.
Most of us. I mean, if you’re Instagram, you just collected $1 billion from Facebook and you didn’t even exist in 2007 (or maybe you did, I’m just too busy to check). But a lot of us schlubs who are still recovering from the last technology bubble (which happened before a lot of the folks at Instagram were in high school) are too skittish to take the plunge again, which is one of the reasons why this recovery bounces along, an economic ball of confusion.
I guess that’s a comment of sorts, but it’s silly to predict what’s going to happen next. In 2000, I introduced a guy named Jim Glassman to give a keynote speech at the fall gaming show. He had just written a book called Dow 36,000. He said that number would be achieved in three to five years. In 2009, he was interviewed by the Washington Post and said he still thought the Dow would hit 36,000, he just wasn’t saying when. Asked if he had any regrets, he said that if he made one mistake it was that one sentence in the book where he did hazard a guess.
Glassman stuck his neck out, sold a lot of books and is a big success by any rational measure, even if he’s remembered for being spectacularly wrong about one thing. I say big deal. It’s good policy to love your fellow man, because there’s a time when we all need forgiving. Think how many times you have been wrong, wrong, wrong. It’s impossible not to be wrong about the future. But yet we still get to have opinions, educated guesses, and guys like me even get to appear semi-intelligent sometimes. Or so I’ve been told. Once.
This recovery has me even more flummoxed than usual, so rather than opine, here are a few factual notes about where we’re at right now and maybe you can draw your own conclusions.
• Employment: The unemployment rate in the United States was last reported at 8.2 percent in March of 2012. From 1948 until 2010 the U.S. unemployment rate averaged 5.7 percent, according to TradingEconomics.com, so we’re a long way from being what is considered healthy. But the trend is headed in the right direction. The number of long-term unemployed (those jobless for 27 weeks and over) held steady at 5.3 million in March, accounting for 42.5 percent of the unemployed. But since April 2010, the number of long-term unemployed has fallen by 1.4 million. North Dakota has the lowest unemployment rate at 3.0 percent; Nevada the highest at 12.0 percent. Mississippi, where we’ll be holding the Southern Gaming Summit this month, has a 9.0 percent unemployment rate. Neighboring Louisiana is at 7.1 percent, the lowest unemployment rate of any southern state. Oklahoma, where gaming is doing quite well, is at 5.4 percent unemployment. Texas, which it depends on, is at 7.0 percent.
• Income: The U.S. Bureau of Economic Analysis recently released 2011 per capita income by state and reported that all 50 states and the District of Columbia had an increase in per capita income from 2010 to 2011 with a national average increase of 4.3 percent. Since the Consumer Price Index increased by 3.14 percent during the same period, the U.S. actually saw a year-over-year gain in real per capita personal income. Cynics will be pleased to know that the District of Columbia has the greatest per capita personal income level in the country, 75.4 percent greater than the national average, easily surpassing Connecticut, the state with the most per capita income in the country in 2011, by 28.5 percent. Personal income averaged $73,105 in DC; Mississippi came in 50th at $32,176. More recently, disposable income, the amount left after taxes and inflation, declined in February and March.
“While households want to spend and will raid their bank accounts to support that habit, unless income gains start improving, consumption will have to slow,” Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pa., told Reuters.
• Confidence: In the latest quarterly survey from the National Association of Business Economics, the share of businesses that believe the economy will grow at a rate of 3.1 percent or faster from the fourth quarter of 2011 through the fourth quarter of this year has tripled since January’s survey, from 5 to 15 percent. Fully 39 percent of panelists foresee an increase in employment over the next six months, up from January’s 27 percent. The Conference Board’s consumer confidence index was slightly down to 69.2 in April from 69.5 in March. The expectations index eased to 81.1 from 82.5, but the present situation index fared better, rising to 51.4 from 49.9.
“As was the case last month, the slight dip [in the main index] was prompted by a moderation in consumers’ short-term outlook, while their assessment of current conditions continued to improve,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic.”.