Is recession the new normal?

Back when the jobless rate was living in the fours, economists were talking about the “natural rate” of unemployment, the thought being that there would always be some background level of unemployment consisting of the chronically unemployable. Full employment, the thinking went, was theoretical because there were many people who had given up on job hunting. And just to heap economic scorn, it is now felt that we may not return to even the 4.0%-ish levels of 2000-2001 for perhaps another four or five years. Reason? Too many jobs have been lost to off-shoring and to corporate “right-sizing” in the face of beleaguered profits, all of which is compounded by a net influx of new workers immigrating to this country. P.K. Data surveys within its recreational products practice reveal how this is negatively impacting sales of swimming pools, boats and recreational vehicles. Consumer optimism within these categories, expressed in likelihood of shopping within the next two years, is in a sustained funk. So while many key indicators are returning to pre-recession levels (GDP, growth and earnings, to name a few), until more people have jobs, it appears that the sad reality is that discretionary purchases are still off in the future.  

A recent article in Businessweek noted that political polls this year have produced some very flawed estimates when compared to the final outcomes of several races. The authors went on to suggest that the very process of market research itself is becoming suspect. Witness two key facts: More than 20% of all U.S. households now only use cell phones (making them all but unreachable) and only about 20% of potential respondents agree to participate in a voluntary survey (a new low). The reader is left with the open question as to real value of survey research. You might expect us, as researchers, to take issue – but we wholeheartedly agree. The art and science of any statistical inquiry is selecting a sample where every member of the population has an equal chance of being selected – hardly the case now given the preceding comments. Our counsel: Start with a fair and equitable sample. Otherwise, save your money, because even throwing darts will produce a more statistically balanced outcome. 

“When you die you usually go to heaven by way of Atlanta” is an amusing aphorism, but most business travelers would rather fly non-stop wherever they are going. In a survey of 1,005 top fliers, 89% said that they would pay a reasonable price premium in order to avoid making unnecessary connections. The average “reasonable” fare increase for a non-stop flight versus a similarly scheduled connecting flight was 32%.