The Herman Trend Alert|
February 13, 2002
Consumer Spending Will Increase
We are entering an interesting period in our economic history. The economy has slipped during the last year, building consumer caution. Consumer spending has decreased, throwing up red flags of warning for other aspects of the economy. These factors influence and feed on each other, threatening to create a false picture.
Economic health in the United States is poised for a long-awaited increase. We have forecast some modest initial growth for as early as the first quarter of 2002. As these positive signs are reported by the news media, they will rekindle the confidence of a nation of purchasers who are eager to be more optimistic. After experiencing such a positive economy, with all the benefits and good feelings, we're anxious to return to those rather recent "good old days."
As spending begins to increase by the end consumer, the retail and wholesale segments of the economy will respond to support these changing attitudes. The response will be cautious at first, of course. We are all sensitive to the risks involved. However, with inventories as low as they are, distributors and manufacturers will join the parade of positive thinking. The return to a strong economy will feed on itself, stimulating higher rates of growth in many sectors as the months roll by.
People in other countries around the world are influenced by what happens in the United States. Television news services instantaneously carry messages far and wide. Behavior follows perceptions, and economic activity responds to influence what happens in each country and in practically every other country, as we see the impact of our global interdependence.
During recent weeks in connection with our speaking and consulting work, we have enjoyed the opportunity of traveling to a number of countries, and we have communicated with colleagues and clients in other parts of the world. We have perceived a mildly cautions exuberance, a sort of excitement under the surface, that encourages us to view our world economic health positively for 2002 and for most of the balance of the decade.
How will you respond? Are you ready?
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