The latest issue of the Humboldt Economic Index offers some fascinating nuggets of information. For example, the composite index (a sketch of our overall economic health) reached a 16-month high in June. On the other hand, the report states that, “All three leading indicators [unemployment insurance claims, building permits and help wanted ads] point to a tougher future.”
That future could be even tougher than those indicators, uh, indicate. Consider the following graph:
The local economy used to be driven by manufacturing whereas now, judging by this graph, retail is the tide raising our ships. Or is it? To drastically oversimplify matters, manufacturing produces money while retail spends it — or, as a wise man once told me, “You can’t make an economy just by washing each other’s cars.”
Now, as anyone who has worked in retail locally can tell you, much of the money that comes in is cash — Benjamins, quite often — bespeckled with pocket lint and tacky with residue from the crop that earned it. There’s no line on the above graph for marijuana cultivation, but you can bet it more or less parallels the retail line. And, as Hank Sims explains in this week’s cover story (on newsstands now, online tomorrow), that industry’s boom days are almost certainly behind us.
This article appears in A Room Without A View.
I am not economist, but that graph sure doesnt look pretty. Any insights as to how our economic development sector and thier ‘targets of opportunity’ are prioritizing profit generating, job creating and sustainable lift? Are we putting more tax money into “economic development” than we are getting in return? Some of us could really just use a payroll tax holiday to help hire new employees and retain current ones in this downturn…
I’m not an economist, either, but I bet that graph is reflected nationwide. It’s more than a local problem. The USA just doesn’t manufacture much anymore. We rapidly lost our industrial core, and blue-collar jobs, with GATT and NAFTA, and corporate globalization that followed. It has really, I think, very little to do with whatever local “industry” people are just trying to generate some income.
There is at least one area where the USA continues to be a leader (not the only leader, but still in the front of the pack) in the actual production of stuff, problem is it is not “tangible” stuff. Assuming that Ruth’s analysis, that the graph would be similar for the nation, is correct (and I think she is right) I wonder where software development, music, art, writing, movie/video, and other “intangible” development falls on that graph?
The local outlook matches the national outlook
Click on my name for a link to an article about the national housing economy, which is a leading indicator
Starting tomorrow I’m gonna start a graph company. We’ll make the graphs YOU need to get across the message YOU want to get across. We’ll make them for LESS LESS LESS*
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