| Retail Is Dying! Sales Are Down! Abandon Ship!” |
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Retail Is Dying! Sales Are Down! Abandon Ship!”
Right. The price of gas goes up 50 cents a gallon, and everyone panics. Mortgage companies finance some bad loans...some people think it’s the sign of the End Times.
History tells us differently.
Do you remember the 1981 recession.? The federal funds rate, which was about 11% in 1979, rose to 20% by June 1981. The prime interest rate, at the time a highly important economic measure, eventually reached 21.5% in June 1982.
Economic effects of the recession
The Federal Reserve's extremely tight monetary policy intentionally plunged the American economy into a deep recession. Employment conditions deteriorated throughout the year. The unemployment rate reached 10.8% in December 1982—higher than at any time in post-war America. Job cutbacks were particularly severe in housing, steel and automobiles. By September 1982, the jobless rate had reached 10.8%. Twelve million people were unemployed, an increase of 4.2 million people since July 1981. Unemployment rates for every major group reached post-war highs, with men age 20 and over particularly hard hit.
We all survived that. In fact, the only thing I noticed affecting my business was that it was harder to get people financed. They would still buy, we just had to be more creative in the financing.
Is the economy (or parts of it) affecting retailers? Sure, the ones who let it. Don’t advertise less, advertise smarter. We’ll be covering some ads later that should be revealing. |