02/19/2008

Recession? Apocryphal or a Pocket Full?

Hello:

Recession. Oooo. That word is enough to cause the knees to shake on the bravest of economists. One pundit said that an economic recession is when your neighbor loses their job, and a depression is when you lose your job.

But let's take a look at the jobs data. According to Business Week, the average weekly jobless claims for the first three months of the last two recessions were a whopping 387,000! According to the Department of Labor, the average jobless claims for the past four weeks (ending 02/02/08) were only 335,000. Hmm...not quite recession material there, but close!

How about overall job losses? Business Week says that the average job losses in the first three months of the last two recessions was 114,000! Wow! Another big number in the past! And for January 2008....only 17,000. Not so big now. Not really recession sized job losses yet.

What gives? Are we recession bound?

According to the Financial Times, corporate executives are much more optimistic than economists. Ok. Maybe that is not news.  But digging deeper into the article, it appears that the farm belt is doing very well thank you, what with increased demand for wheat, corn, soy, ethanol products, etc...while the nation's coasts linger in mortgage meltdowns, real estate ennui, and banking boo-boos.

If the nation's breadbasket is doing well, maybe the next economic upswing won't be "The Revenge of the Nerd" as it was during the 90's tech bubble, or "The Revenge of the Gird-er" as it was during the real estate bubble, but rather, "The Revenge of the Herd" as our nation's farmland takes the lead by providing sustenance to emerging economies and sources of alternative fuel to the global economy. 

Therefore, let's call it a pocket full of coastal recessions while the heartland keeps the pulse of the economy beating steadily.

As we endure tax season, donors, just like everyone else, become increasingly sensitive to the annual tax burden. Perhaps this is a good time to bring up the topic of philanthropic strategies that have a potential benefit of tax relief. Why send dollars across the country, when so much good can be done locally?

 

Terri G. Millson, CIMA, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager