Economic Pessimists Keep the Reins
EmailEconomic pessimists outnumber optimists for the second month straight in the latest ABC News consumer survey, pushing aside a briefly more positive assessment in May and underscoring the public’s deep economic doldrums.
In terms of current sentiment, 89 percent say the national economy’s in bad shape, 74 percent call it a bad time to spend money and 55 percent rate their personal finances negatively. The ABC News Consumer Comfort Index, based on these, stands at -45 on its scale of +100 to -100.
In a separate, monthly measure of expectations, 25 percent say the economy’s improving, while 31 percent say it’s getting worse. The rest say it’s holding steady, which for nearly all means steadily bad. Optimists had slightly outnumbered pessimists, 33-29 percent, in May, the first time that’d happened in six years. It didn’t hold.
At -45 the CCI’s a point from its 2010 average, -46. It averaged -48 last year, its worst on record in 24 years of weekly surveys; its long-term average is -13. Ratings of the national economy are 26 points worse than average; of the buying climate and personal finances, both 11 points worse.
Click here for tables with this week’s CCI data.
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In this increasingly likely “double dip recession”, the question on World News for August 13, 2010 was asked “Where have all the jobs lost in the recession gone”.
I can say that it appears this “double dip” economic activity has strengthen the resolve of the company I work for to participate in rather belatedly in the “off shoring” or “outsourcing” solution. Much to the horror of myself and the remaining colleagues, nearly 1/5 of the staff of the New York offices my company currently has were selected for “rolling dismissals”.
While the company will ultimately dismiss the selected employees, the company is using bonus incentives as well as some type of severance package to retain those involved with projects that are significant to the future business of my company for a short-term basis. Effectively, within approximately one year, the 70 plus people will join the estimated 14 to 25 million unemployed.
Ironically our company recently divested itself of a portion of the overall company reaping 1.2 billion dollars. The management deemed that all of this windfall profit from the sale needed to go towards the repurchasing of outstanding stock rather than to retain those recently selected for rolling terminations.
I am assuming that similar activities are occurring around the world at our other primary offices in London, Paris, etc. Effectively the bottom line, the ultimate share price and the overarching concept that the company can be as effective with outsourcing is resulting in this continual release of employees at least here in the US and I presume throughout Europe.
I don’t see the US economy pulling out of this awful recession any time soon based on the mindset of the executives for my company. I fear this mindset exists in far too many other companies in the US and Europe.
Without job prospects for those that were chosen for employment termination, the economies around the world will continue to sputter at best until something can break this cycle (let’s hope is not something as horrible as a world war).
It is mind-boggling that the vast number of corporations in the US have become so fixated on “outsourcing” as the ultimate solution to making their stock prices higher and pretending that is also improves the products (whether services, software or actual factory produced items).
How much longer will it take for the world-wide corporate community to wake up and begin rebuilding their domestic staffs along with understanding and accepting that the bottom line will not grow at the gargantuan levels that occurred during the various “bubble” economic times in the past.
Sincerely yours,
A nervous software employee in New York City.
Posted by: G Oleson | August 13, 2010, 10:34 pm 10:34 pm