The "experts" keep talking about what 2010 will be like now that the recession is over. All I can say is: Based on what? The shenanigans in the stock market? The happy talk coming out of Washington? The guestimates of clueless economists?
In truth, if you look at relatively recent data on sales tax collections, charitable giving, and immigration flows, among many other things, there seems to be little evidence that the secular downturn which began more than two years ago has run its course, let alone that an economic recovery is at hand:
"State Sales Tax Numbers: The Truth Appears" (The Market Ticker)
Leave it to the WSJ to report the truth - and then try to paper over it:
Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged 12% to about $58 billion. Together, sales and income taxes make up roughly half of state and local tax revenue.
The WSJ then goes on to opine:
State and local tax revenues tend to lag behind the downturns as well as the upturns in the economy because of the time it takes for collections to catch up with depressed store sales and diminished incomes.
This is true for income taxes.
It is absolutely false when it comes to sales taxes.
As someone who ran a registered establishment for more than a decade that was responsible for filing and paying sales taxes (I signed more returns "under penalty of perjury" than I can count during those years!) I can state that it is an absolute fact that sales tax returns are filed and monies are remitted MONTHLY - if there is an upturn in business - an actual upturn - it shows up NOT MORE THAN ONE MONTH LATER in sales tax receipts. Period.
There has been no recovery in final retail demand and the proof is right here in the form of sales tax remittances.
Don't be fooled.
"Most Charities Fare Poorly in Crucial End-of-Year Giving Season" (Chronicle of Philanthropy)
Americans are buying more holiday gifts this season than last, but that same spirit of generosity has yet to reach most charities.
In fact, a Chronicle poll of 395 charities conducted over the past week finds that one-third of charities expect donations to decline by 10 percent or more by year's end. Another 21 percent also expect donations to decline, although by smaller amounts. Charities of all sizes seem to be affected by the downturn.
...
Interviews with fund raisers nationwide conducted by The Chronicle suggest that many charities are doing better in obtaining large gifts from some of their wealthiest donors and in persuading more people of modest means to give.
But that is not enough to stave off a decline in overall contributions.
"When we look at major gifts, $25,000 and up, the dollar amounts are up, but the number of donors is down," says Bill Sturtevant, senior vice president for principal gifts at the University of Illinois Foundation. "Yet when we look at the broad base of donors under this level, the number of donors is up and dollars are down."
Mr. Sturtevant speculates that during hard times, middle-income or poor people are often moved to make cash gifts to help others, but they aren't so likely to give as much as they did in the past.
Meanwhile, upper-income donors who give stock or real estate — or base their donations on the state of those investments — are more likely to hold off altogether in making any donations in an uncertain economy. But those who feel secure enough to keep making big gifts are often inclined to give more in recognition of extraordinary economic needs.
(Hat tip to Recessionwire.)
"New Figures Show (Another) Drop in Mexicans Coming to the US" (Christian Science Monitor)
The US recession continues to discourage would-be immigrants, with fresh Mexican government numbers showing a 40 percent drop in Mexicans emigrating in the past two years.
The number of Mexicans leaving the country to go abroad in the third quarter of this year dropped nearly 10 percent from the same period last year and fell about 40 percent compared to the number in 2007, as the recession in the US continued to discourage would-be immigrants.
According to numbers released this week by the National Statistics and Geography Institute (INEGI) in Mexico, some 142,052 Mexicans emigrated in the third quarter of this year. That's down from 155,090 last year and 234,146 the year before.
“It’s primarily the economy, because these are people who have been coming to the US for many years in response to labor market demands,” says Doris Meissner, director of the US Immigration Policy Program at the Migration Policy Institute in Washington. “That went away with the recession.”
I like Denninger as much as the next guy, but 2008 Q3 GDP was beginning of decline and was felt first in cap investment and construction. Fuel prices were high, so the drop in sales tax revenue didn't hit until late Q3 and Q4. Remember $4/gallon gas - it doesn't hit CPI but it does affect sales tax revenues.
So a drop of 8.5% y/y for Q3 isn't as awful as might sound. I am much more interested in Q4 comparisons, which I still expect negative but less so, we shall see.
Posted by: pebird | December 31, 2009 at 01:17 AM
Q4 GDP will be up, they're is so many people shopping.
The root of the matter is: if your unemployed, no one cares, you are a scrap of society. The Mood has changed in America.
Posted by: Matt | December 31, 2009 at 08:34 AM