The economy is something we are all affected by, made aware because of our income and spending capacities. Until i began this business i paid a bit of attention to the economy, but i was not searching for trends, patterns, behaviors.
Economics is one of the social sciences. That always causes me to sit back and ponder it a bit, but as i spend more energy watching it i am noticing how it is a series of patterns of behavior. In the simplest of terms, it is a way of making a quick judgement of the health and stability of a household, company, or country.
So here are several patterns, or concepts that we have noticed this year. By no means am i an expert, just an interested observer in the spending and business behavior of the economy. Here goes:
- The state of the economy in 2016 is still shaky – Since the economic collapse of 2008-2010 the economy here in America has not fully recovered. In Northern Ohio, where we live, the economy has rallied a bit, but has not returned to the robust economy we knew prior.
- The economy looks different depending on where in the USA you live. Where there are plentiful jobs, and stability of companies the economy looks more stable. Around here there are still a lot more people than jobs, and companies are not opening up positions as readily as in the past.
- Politics affect spending – We noticed a sharp drop off of sales in mid Sepetember and on through early November and we suspect it was a growing uncertainty of the impact of the presidential election on economic policies. People were refraining from those little expendable purchases because they did not know what the future holds. When the economy is more stable the political winds blow yet do not seem to have significant impact. But in 2016, from our vantage, there is a sensitivity, and a perception of the scarcity of income, or the fragility of maintaining sources of income.
- We are seeing a trend that expendable income is growing smaller and smaller, with the majority of income spent on the staples of life – housing, food, utilities, clothing. We suspect it is a combination of inflationary factors, rise in tax rates, increase in expense for health insurance, and a stagnation of income. In other words, it is costing more to maintain the same life with no change in income.
- We are seeing a growing awareness of consumers to support local businesses, and keep the economy growing locally. Did you know that when you shop a chain store more than 70% of each sale goes to the company wherever it is located…. and only 30% stays local.
Give me a little time and i could continue to think through the state of the economy, discuss some of the factors that explain my view. Mind you, this is just my observations, not one of a trained economist…. but it is amazing how small bits of news affect us so largely.
Art has a specific place in the economy, tucked in the “expendable” category. Studies of economy have shown that only 5-10% of people are art patrons. So judging the economy from an artist’s eyes paints a more specific picture of a segment of the society. Our soap business, on the other hand, because it is consumable, provides a more accurate picture of the day to day economics of most people. Consumables are a part of daily expense. Art is not.
I found this amazing quick 30 minute video that explains the economy in the clearest and simplest terms…if you have the time, it is worth the watch.
