Monday, October 17, 2011

Let them Eat Cake

DNC Chair Debbie Wasserman Schultz insisted to October 4th that “anyone’ can see that the economy is improving even though 115,730 people lost their jobs in September (the most in more than two years). Pres. Obama admitted that Americans were not better off today than four years ago.

Fed officials “saw considerable uncertainty surrounding the outlook for a gradual pickup in economic growth,” with the economy showing only a weak bounce after the recession in contrast to past recoveries. Reasons for this weakness remained “unclear” although some blamed business and consumer debt and the distressed housing market.

Interesting isn’t it?

Here is a piece of good news. Bloomberg has gone on record as saying that a string of stronger-than-projected statistics -- capped by the news on Oct. 7 of a 103,000 rise in payrolls last month -- has prompted economists at Goldman Sachs Group Inc. and Macroeconomic Advisers LLC to raise their growth forecasts for third quarter growth to 2.5 percent from about 2 percent. That’s nearly double the second quarter’s 1.3 percent rate and would be the fastest growth in a year. The interesting aspect to this is that Bernanke projected the economy to grow at 3% back in July.

Here's the really good news: Restaurant industry sales in 2011 are expected to reach a record $604 billion and sales are projected to improve 3.6% over 2010 sales. Every dollar spent in restaurants generates $2.05 in the overall economy and restaurant employees comprise nearly 10% of the entire U.S. workforce. One of the barometers of economic improvement: When we start feeling flush enough to order the wine and the dessert again.

Fundamentally, I trust the fact that we are all starting to buy dessert as the most pragmatic indication that things might actually be getting better. We know that the government is not going to help in the short term. If we are going to see this thing turn around it is going to be one dessert at a time. There isn’t going to be a bailout of the pie factory or a fork ready stimulus plan at the diners. It’s going to be businesses feeling better about the economy and willing to talk about it over dessert.

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