The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Lack of Expansion (In the Economy, Not My Belt)

On August 3rd, 2015, posted in: Uncategorized by

belt tighteningUh-oh. It’s time for more talking about the economy. You’re thinking: “Can’t this guy find other material to talk about?” Yes. Yes, I can. But the fact of the matter is that in the pie of my life, this is a big slice. Actually, it is a big slice in all of our lives. Hard to talk about the economy without talking about consumers. Remember, we drive the bus. Two-thirds of the economy is based on our spending habits. So, here I go again.

We are in the sixth year of what is referred to as “economic expansion.” Sort of like holes in a belt. You remember a starting point, pick a date and measure your own expansion over that period of time. Who can remember at a much younger age, self-punching more holes in the belt because it was just too big? Now, through “expansion,” the realization is that there are more holes showing than not. That’s “expansion.” The economy has been slow.

In the past six years of our economy, we have not expanded much. Modest is the word most popularly used to describe our progress. During the spring and summer, we tend to bounce back from our usual slow start of the year. Spring fever gets us out and about. Homes need repairing, vacations are taken, events are planned, new “summer wardrobe collections” are needed, and we eat more hot dogs and hamburgers. Yes, grilling is part of the economy too — at least, at my house it is.

What has confused many about our lackluster performance in the spending money category is that we are supposed to have more of it to spend. Say what? Yeah, that’s what those in the know say. According to the rulers of economic monitoring, our wages are up, and gas is cheaper. So why aren’t we dashing through the aisles of every merchant in town, sweeping stuff into our shopping carts and hollering “yahoo” at our newfound wealth?

Well, as we look for clues, we might want to check on older people and what’s happening with them. I’m an older person, but not in the category under surveillance.

Many in the Sammy Davis Jr. generation are hanging on to their money. Rates are low, so investment income has been stymied. They’re stretching every dollar to last longer. Spending is not an option. Sure, gas is cheaper, but they’re driving less to make the current car last. And any difference caused by lower gas prices is saved, not spent. Who cares about summer wardrobes? Stripes, plaids, Bermuda shorts and black socks are always in style.

I’m a lot closer in my spending habits to my elders than those young whippersnappers out there. So count me in as part of the lack of expansion. Economically speaking, not in belt terms.

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