I finally got up the nerve Monday to open my quarterly 401K statement and I received the shock of the year: it was actually up 20%! Well, hallelujah. I had gotten used to watching the thing tumble, so this was an unexpected change of pace.
That improvement jives with what economists are seeing. They’re encouraged enough by recently released numbers that people are allowing themselves to utter phrases like “the recession is coming to an end,” and “advertising recovery,” although the recently concluded upfronts seem to be mired in an unnecessarily negative second quarter mindset. If advertising is in fact about to recover, the scatter market could be more interesting this year than advertisers anticipated.
Today, Federal Reserve Chairman Ben Bernanke said “barometers suggest that economic activity is leveling out,” according to the AP’s Jeanine Aversa. In June, the Fed was less optimistic, noting only that our economy’s contraction was slowing. For the recession to really be over, we need to see GDP growth, but this is a good start.
Aversa also points out that the Fed plans to keep the banking lending rate between 0 and .25% for the rest of the year. That translates into lower lending rates across the board and sends a clear signal to consumers: make your big purchases now. From the TV industry’s point of view, let’s hope this means that car dealers decide they want to get that message out, and that they come back to TV stations to do that. The cash-for-clunkers program already has been a much-needed boon for TV stations. Low-interest lending could work that way as well.
In the meantime, other indicators remain depressed, particularly unemployment. Granted, it was down to 9.4% instead of 9.5% in July – it says something that I now know these percentages by heart – but economists still don’t expect unemployment to improve this year. When we see companies start to hire again, we’ll know we’re really out of the woods.
Meanwhile, the recession’s end will mean it’s time to start watching for a new danger: inflation. All the money that’s flooded the economy in order to prevent depression now may be responsible for high prices. That coupled with merchants’ realization that consumers are willing to spend money again. That’s another reason why now’s the time to make big purchases if you can swing it: interest rates and prices are low. And that’s why advertisers are likely to come back to the table soon: they’re going to want to get a piece of the coming action.
Economy, start your engines. We’re all ready.
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