A real economic downturn, or not so much?

May 5, 2008 5:05 AM

How is the downturn in the US economy affecting you?

I live in Australia, so have limited exposure to the US day-to-day economy, but read a fair bit of US media. If you live in the US you can easily look at a NYT story quoting starving Florida realtors and say "beat up", but from here it is hard to tell what is genuine, and what is exaggerated (or at least unrepresentative) to sell newspapers.
Are MeFi members really finding it tough? Context with a before and after would help understand comments.

posted by bystander to work & money (78 answers total)

Food and gas prices are up. I had an in-the-black personal budget before, and I still do. My IRA is doing crappy. I won't be able to buy a house for a few more years thanks to tight credit, but I hadn't planned on doing so.
posted by a robot made out of meat at 5:18 AM on May 5, 2008

Not at all really. I am a 24 year old graduate student living off of loan money. Gas prices are markedly high but I don't drive that much and I haven't noticed any substantial increase in food costs. Whenever I read similar articles about the economy I think "man I wonder when thats going to hit my neck of the woods" but it hasn't yet. I kind of wonder if the whole Great Depression was like this: media having a field day but a lot of individuals entirely apathetic. Probably not.
posted by norabarnacl3 at 5:24 AM on May 5, 2008

@robot... nails it. Food and gas are up, IRA and investments are down, people are cutting back with impulse purchases or unnecessary treats (Starbucks profits are way down) for the most part, and might be cutting back in other areas as well (necessary driving only, budgeting for groceries, etc).
posted by willmize at 5:30 AM on May 5, 2008

I live in the Northeast US and the only effects I have witnessed first-hand are:

• Higher food prices
• Higher gas prices
• More houses on the market for longer periods of time
• Anecdotal evidence of increased homelessness in large cities, (New York, LA and Boston first-hand)
The traditional definition around here has been "A recession is when your neighbor loses his job" and "A depression is when you lose your job". If this is true then I haven't witnessed that it's a recession yet, as most folks I know are relatively securely employed. Likewise, it's not like it was in late 2000 through 2002 where I and many others did lose their jobs. However, there is a psychological force at play with the trifecta of high gas and food prices combined with the weak housing market. Everyone is talking about the weak economy, and even if you haven't been drastically affected, there is the sense that you may be.

posted by jeremias at 5:32 AM on May 5, 2008

I live in Sweden but all my savings are in dollars. Everything has become 1/7 more expensive for me in the last year or so due to the weak dollar.
posted by beerbajay at 5:38 AM on May 5, 2008

I won't be able to buy a house for a few more years thanks to tight credit

And I won't be able to sell mine for a few years, thanks to housing prices being in the crapper. Fortunately, I hadn't planned to do so either, but not having the option is sort of scary.
posted by boomchicka at 5:45 AM on May 5, 2008

But to address the question in the title of your post, I don't think it's as bad as the media keeps saying it is. Maybe it will get that bad, maybe not, who knows, certainly not me. But I think the "OMG IMPENDING DOOM" media frenzy is freaking people out, possibly more than necessary.
posted by boomchicka at 5:51 AM on May 5, 2008 [1 favorite]

2nd robot and willmize. As cliché as this will sound, my wife and I actually stopped driving our (small) SUV and went back to the Honda Civic as our daily driver to save some gas money. We also eat out a lot less and prepare lunches and dinners at home. Our food prices have gone up a little bit, enough that we notice the difference at the grocery store but not enough that we have changed the stuff we purchase. Our mortgage is fixed rate and we were very conservative in the amount we spent on a house, so that hasn't been a problem, but we have friends who purchased more they could afford with variable rate mortgages that are starting to get really worried, and friends with houses on the market that can't sell them. Overall, for us it hasn't been bad, but we are fiscally sound and used to living fairly frugally anyway. Really, looking back over this post, the changes we have made are things that we probably should have been doing all along.
posted by jtfowl0 at 5:52 AM on May 5, 2008

Here in Cleveland, we have a large number of houses for sale, houses in foreclosure, etc. But it's been like this for a while, and the region has had economic and demographic problems for the past few decades. These problems have perhaps been exacerbated over the past year, but I still see construction cranes in operation and roofers putting tiles on the condo project the next block over.

Consider that US employment is more or less 5% and has been more or less 5% for a number of years. That more-or-less 5% is around the average for the 1990s expansion (eyeballing this graph) and lower than the rate in the 1980s, which are generally considered to be prosperous times indeed. The economy is not a disaster. It will suck particularly if your a mortgage broker or a real estate agent or if you've overleveraged yourself in housing, or if you work in some financial houses. Possibly, some of the mainstream media may be facing dire straights, because content distribution technology has been changing underneath them and eyeballs have been moving away from newsprint and TV to the Internet, but that's just the sort of creative destruction that powers our economy.

For the rest of us, milk and honey are no longer flowing down the streets, we have to be more conscious of our purchasing decisions, and we may be thinking of getting a compact car instead of an SUV when we get around to replacing our car. It isn't a disaster where we have to stand in line for bread and camp out for in the park for shelter, even though the news media and the more hysterical among us believe that such scenarios are around the corner.

Going back to the adage about it being a recession if your neighbor loses his job, and a depression if you lose yours, some of the hysterics might be due to turbulent times for the media. That, and screaming headlines of catastrophe may sell more copy than "eh, I'll pass on my latte from Starbuck's today".
posted by chengjih at 5:54 AM on May 5, 2008

Me personally? Not a whole lot. I have a family of four. Our food bill keeps climbing, but I like to eat. My trading account is doing well. Over the last few weeks I have really netted some nice trades. Starbuck's lines are down in the morning - so that is a plus.

On the other side - I am not sure how a college student would make it now. Back when I was in college (graduated in 1999) - it seemed like you could scrounge change together and get enough gas for a week. And food was cheap as well.
posted by jaythebull at 5:58 AM on May 5, 2008

I will also jump on the bandwagon with robot. Food and gas are up, retirement investments are down. I just bought a condo last May, so I'm neither looking for credit, nor to sell. I work in retail and the foot traffic in the store is definitely down, but April and May are notoriously slow months for us anyway. February and March were about flat.

When the Federal Reserve eases interest rates (as they have for like 5-6 sessions in a row), it takes about six months for it to trickle down to the general economy. If that's the case, we should start seeing the effect of their actions this summer.

In general, I'm just keeping a closer eye on the markets, maintaining a 10-12 month cash reserve on hand for emergencies, and living mostly status quo.
posted by netbros at 6:00 AM on May 5, 2008

I'm in Boston. When I was looking for a new apartment, one of the realtors I spoke to said that places that were going for $1400/month a year or two ago have jumped to about $1600/month recently because of increased demand. He claimed people were dumping their condos and beginning to rent again.

I laid out a pretty conservative budget when I got here two years ago - I actually budgeted for $4/gal. gasoline back then, so I managed to save a bit. Now my budget's a bit more realistic because of increased prices, but it hasn't really hurt me at all. I'm trying to use my bicycle more and my car less, but other than that I haven't changed my lifestyle much.
posted by backseatpilot at 6:08 AM on May 5, 2008

We're saving more instead of spending these days, but that's mostly due to the fact that we're getting married in the fall. Like everyone else, the main effect has been higher food and gas prices. We have to commute fairly long distances to work (45 minutes on average) because we can't afford rents closer to work. Even with the supposed housing market crash, housing costs are still very high in our area (northwest of Chicago). We see a lot of for-sale signs, but not a lot of crazy-low prices.

Also, some poor dude down the road from us has been trying to sell his Land Rover for months. I suspect it will be there for awhile to come.
posted by desjardins at 6:08 AM on May 5, 2008

Gas prices are up, but I've found I'm only spending about $5 more to fill up my tank than I was a few months ago (e.g. it used to cost $22 to fill up, now it's $27 - though I always refuel at about 3/4 of a tank).

My company just had a huge round of layoffs, including several people from my department and others who I worked with regularly, and they plan to continue layoffs and cost cutting measures for the next three years. (This is due to one of our main products going off patent, though - it just happened to coincide with this recession.)

My IRA and 401(k) lost several thousand dollars in the last quarter.

My husband and I were planning to move in the next couple years, but now seem resigned to our fate and plan to stay in our current home for a while, so we are instead doing some other home improvements we might otherwise have put off (replacing carpet, some work outdoors, etc.).

I haven't really cut back my personal spending any, though I am kind of naturally frugal. But I find I'm a little more mindful of things, like, "I might be buying this now, but I'm okay knowing in the future that I'll have to watch my spending."
posted by LolaGeek at 6:08 AM on May 5, 2008

Oil heat is very high. Over the winter I put the thermostat Waaaaayy down. I am more aware of where and how I drive. All costs are up, and some are up for no apparent reason...Cable TV and Internet? Insurance? I sense a lot of band-wagon jumping here.
posted by Gungho at 6:09 AM on May 5, 2008

On the flipside, you can get a great deal on a house or vacation home if you are in the market. There are some really great deals out there.
posted by pearlybob at 6:10 AM on May 5, 2008

In the American Midwest, and I have to say in all honesty that the housing crisis and attendant economic basket case-ness has been a lot kinder to me than to some others. I was able to refinance my (dowdy traditional 30-year fixed-rate) mortgage at half a point's savings, and purchase a badly-needed new car (the one it replaced was 20 years old).

Unlike many places in the US that have had badly-overheated local real estate markets, the market here is traditionally soft. Additionally, my neighborhood is very working class, so we're not seeing the levels of foreclosures, precipitous real estate value degradation, and attendant other problems that some friends who live in the (e.g.) Washington, DC region have had to face.

That said, food and fuel prices are substantially higher, which by its nature has the same general economic impact as regressive taxation. I think jeremias is quite right: the psychological forces here are as significant as the real ones
posted by Emperor SnooKloze at 6:10 AM on May 5, 2008

I'm in the Northeast as well, and again, food and gas are eating up the budget. My son is heading to college next year, and finances definitely played a large part in choosing a school.

We did start a household budget for the first time this January, and are watching our spending, but that is due more to the upcoming college costs.
posted by genefinder at 6:13 AM on May 5, 2008

Don't forget that by asking this question on AskMe, you're polling a very small and specific segment of Americans. Rest assured, people who make minimum wage are more than inconvenienced by $4 gas and increased food costs.
posted by Banky_Edwards at 6:13 AM on May 5, 2008 [1 favorite]

I kind of wonder if the whole Great Depression was like this: media having a field day but a lot of individuals entirely apathetic.

One in three Americans was unemployed during the GD.
posted by HotPatatta at 6:20 AM on May 5, 2008

Most people on my block have either lost a job, or are preparing in case they do. My personal opinion is that government-reported unemployment statistics are primarily bullshit, particulary under the current administrations (both federal and state).

Value of retirement savings down about 10% in the last six months.

Cost of most things is up; cost of transportation (by car) has roughly doubled in the last 5 years or so.

Home equity was ridiculously overinflated last year (which I knew), I expected it to go down, how far it's fallen is unknown. As much as 2/3 of it might have disappeared. The tax valuation on the house went down this year, which meant a slight decrease in property tax that's been offset by insurance increases, so lower taxes have meant diddly squat. I'm in a sane, fixed-rate mortgage, so I don't have to worry about that aspect. A lot of the real estate wackiness seems to have happened in the far, outer suburbs with "starter castles", or in really poor neighborhoods with mortgage fraud, not in the cozy near-to-town neighborhood I'm in. There are some boarded-up homes maybe a mile away, none that I've seen within afternoon walk distance.

It's been a cold, long winter and late spring in Minnesota, so lots of money has gone to natural gas and energy utilities.

Some local major employers are really stressed. Retailing in general is bad, Northwest Airlines is about to disappear into a merger, the Ford truck factory is shutting down, but those problems have been on the radar for a few years now. Lower tax receipts mean that government offices are cutting back.

Anecdotally, shops seem really empty.
posted by gimonca at 6:23 AM on May 5, 2008

Here in San Antonio, like Texas in general, we never saw huge spikes in real estate values. We sold our house in Houston about 7 months ago right when the housing market was beginning to collapse around the country, but we did fine - probably due to the the boom in the oil industry propping prices up.
posted by cr_joe at 6:27 AM on May 5, 2008

I make close to minimum wage, lately. Being a waitress, it's easy to see that people aren't going out to eat as much, and when they do it tends to be for lunch. I give my boyfriend 20 dollars a week for gas, and he puts in 20 or 30 since it's his car, and we haven't been going out to eat too much. But we have insanely cheap rent (440 a month, 10 minutes from the beach in FL) and are both getting raises. So things are actually getting better for us.
posted by d13t_p3ps1 at 6:27 AM on May 5, 2008

Food is up, gas is up, wages are stagnant, and people I know who are job-hunting are having a really tough time of it. Buying and selling a house is trickier than it was a short while ago, because of pricing uncertainty and mortgages being difficult to get sometimes.

Like most things economical, there are two realities -- if you are making a comfortable wage and aren't in danger of being fired, and you are not overextended in terms of debt, the increased gas and food costs are a minor inconvenience. If you are supporting a family on one modest income and have worries about being laid-off (plus all the usual US healthcare issues), and/or have significant debt relative to your income, the increased costs of gas and food are really terrible. People in that category are having to make really tough choices, like gas vs vegetables, or delaying dental care for the kids, or rent vs utilities. That's not a new divide in the US, but this recession/slowdown/whatever it's being called is intensifying the impacts of that divide.

The demographics of MeFi are going to skew towards the better-off side of that divide, but hardly monolithically.
posted by Forktine at 6:30 AM on May 5, 2008

Despite some coincidental belt-tightening, my monthly food and utility expenses are up 15% from just a few months ago. Gas for the car is up about the same amount in the same period.

What it means - monthly expenses pared to the minimum short of a big structural change (such as finding a cheaper place to live.) Shopping at the discount grocery instead of the yuppie one. Planting a garden in earnest. Not going to movies.
posted by zippy at 6:34 AM on May 5, 2008

The industry I am in, satellite broadband installation and service, is one I would think would be suffering under a recession. But our business is having a record quarter.
posted by waraw at 6:36 AM on May 5, 2008

thanks to the oil boom in my area, not so much. gas and food are higher and i will probably buy a smaller car this fall when i buy instead of the suv my husband would like, but i was leaning that way anyway.

my husband is in the manufacturing business and they are swamped right now as opposed to last year when it was dead. can't read too much into that though, as it is a fairly seasonal business.

housing here was never particularily overpriced so that is not a problem. our fund managers for 401 (k) were all gloom and doom though. what i don't know is if that means our usual 20% return is now 2% or a 20% loss.

what i don't get is why noone saw it coming regarding the housing market and lending practices. one bank here back in the 80's oil boom collapsed and had ramifications all over the country. Honestly it wasn't that long ago poor lending practices caused a major problem in this country and i don't get why people didn't learn anything from it.
posted by domino at 6:40 AM on May 5, 2008

The most drastic thing that's happened to me was having to move suddenly and unexpectedly because my former landlady was about to lose the triplex in which I was living. Even though Los Angeles real estate values have fallen, rents have not, and the only thing I could afford is the tiny one-room studio, sans kitchen, that I currently live in.

The other effect I've felt has been the obvious - crazy high gas prices. One station nearby is up to $4.69 a gallon, so I go out of my way to find the cheap gas, and limit nonessential driving.
posted by chez shoes at 6:44 AM on May 5, 2008

I'm a graduate student, hopefully insulating me somewhat from job loss.

Food prices are up, energy a bit. In general I live below my means even on grad student pay, with few expenses (e.g. no car), so there's no real worries as of yet.

On the bright side, I'll be getting my economic stimulus bribe, which out of contrariness I intend to either save or spend in the underground economy.
posted by TheOnlyCoolTim at 6:48 AM on May 5, 2008

Banky_Edwards: "Don't forget that by asking this question on AskMe, you're polling a very small and specific segment of Americans. Rest assured, people who make minimum wage are more than inconvenienced by $4 gas and increased food costs."

This is a good observation. Macroeconomic changes like recessions, changes in the unemployment rate, or downturns in the economy do not equally impact the population. A moderate increase in the cost of living will be imperceptible to some, an inconvenience to many, and catastrophic to a few. While there are exceptions, most Mefites - generally literate, educated, younger people with access to computers - fall into the second category.
posted by googly at 6:49 AM on May 5, 2008

I just finished law school, where I studied to be a patent attorney. The economic downturn has, over the past couple of years, resulted in a significant decrease in patent filings across the country. This was one reason why I was unable to find a job as a patent attorney. Taking out $100,000 in loans to pay for law school has turned out to be a very bad investment for me, and I went to a top 25 law school with a strong IP program.
posted by jedicus at 6:55 AM on May 5, 2008

I paid $40 to fill up my Civic. When I bought the car a few years ago, it cost a little over half that. Luckily, I get good mileage and don't drive very far to work or anywhere else.
posted by Green Eyed Monster at 6:57 AM on May 5, 2008 [1 favorite]

It hasn't affected me much as a college student. Gas prices are a killer for sure, and will probably help decide how we go on our summer vacation, but we do still have enough money to go on vacation. It's also helped me decide I need a car with better mileage, but buying another car won't happen for ages. It did help my boyfriend decide to buy a Prius, though.

That being said, a coworker had to have surgery last week, and she can't afford to take more than a week off of work, even though she probably should. Cheaper food & gas wouldn't have made much of a difference, but enough that she could probably take another day or two off. My parents won't be able to sell our house in Denver that my mom's been living in while in grad school for awhile, and a lot of the surrounding houses in that neighborhood are in foreclosure. My dad is fully expecting to lose his job in the next year or two, but I'm not sure if that's solely because of the economy.
posted by lilac girl at 7:02 AM on May 5, 2008

Well, it's a depression for me, then, because I just lost a job due to cutbacks.
posted by pjern at 7:05 AM on May 5, 2008 [1 favorite]

My mother has this annoying habit of going "It can't be a recession! Look at all these people (at the mall, eating out, etc.)" which frustrates me greatly. The US would have to have some catastrophic economic failures (to the point of becoming almost a third-world country) to really effect middle-age middle-class white folks. As always, it effects poor people, unskilled workers, and young people of all backgrounds.

And, yeah, don't try to sell a house, especially in the Midwest.
posted by dagnyscott at 7:10 AM on May 5, 2008

My 401k is stagnant and my condo's been on the market for two months... But I pretty much expected that. I don't drive, and have always spent a lot on food to get high-quality stuff, so that's not particularly painful. My friends are doing fine too, getting promotions and raises. I'm feeling the stock market and housing slump but day-to-day life isn't affected.
posted by Mr Bunnsy at 7:13 AM on May 5, 2008

Oh, and my company is having trouble hiring good candidates in several areas, so anecdotally speaking, the job market is still pretty tight.
posted by Mr Bunnsy at 7:14 AM on May 5, 2008

I've been driving my CRX in a much more gas-efficient way lately - coasting down hills, shutting it off if I'm gonna be stopped on a downhill stoplight and can pop-start it, starting from standstills v-e-r-y-s-l-o-w-l-y, and short-shifting - 2nd, 4th, 5th. This allows me to still only pay about 25/week for gas, with a 50 mile round trip daily commute. I've avoided driving my truck like the plague.

I work for a plumbing company. Most of our regular general contractors have had mandatory pay cuts for the office guys. Our own plumbers have had work, but just barely. Luckily, we do a *lot* of work in medical office space and retirement complexes, so we've stayed busy. Our sister company does custom homes. They've laid off half their plumbers (honestly, a couple of them should have been gone long ago) and the rest are working 3-4 days a week. Practically, for me, it means I've been looking over my shoulder at work most days.
posted by notsnot at 7:14 AM on May 5, 2008

Shopping is down (retail powers approx 2/3rds of the US economy, construction is a large part of the rest), which is a bad sign of things to come. The mall was pretty empty (but this is 100% anecdotal and probably because I'm doing a confirmation biased sampling)...

I've noticed that my Target store (a big, wal-mart-type mega-buy-low mart) has a lot fewer items on the shelves recently. I don't take this to mean that products are not available, but that companies are changing the way they figure out logistics for products due to high gas / energy prices. Nearly all products on the shelves in the US spend some time on a big rig truck to get to market, so some of the rise in food prices is actually just a rise in getting that sweet sweet pineapple into a customer's hand. Retail is a very cyclic business and takes out huge loans to keep solvent during the lean times. As credit for these companies is also tight, things get hard for big retail chains. Linens&Things just went under due to the credit crunch.

My only friend who's been affected by the slowdown is the guy who runs a small parking company. They do valet parking for high-end restaurants and clubs in Atlanta, GA. This is obviously a leading indicator, and he's estimating that his business is down about 30% - 40%. And restaurants have also been slower paying his invoices. Not dire, but not a good signal either.
posted by zpousman at 7:16 AM on May 5, 2008

Minimal affect, here. My husband (self employed) is busy. There are changes in my job, but not due to the economy. The gas prices suck but I only fill up my Versa about once a month-- I do drive to work but it's about a mile each way. The 401k and IRA have dropped but that doesn't really bother me since I'm not planning to tap into them for decades.

The only change I've seen is the condo market here in Portland has dropped a lot-- we have friends who bought a 1-br for 160; it would have sold for 200 a couple of years ago. So in a way that's a good thing-- not so overvalued and a good time for first-time buyers.

My mom's trying to sell a condo in Belmont MA though and I am a little anxious about it.
posted by miss tea at 7:17 AM on May 5, 2008

Coming soon to a pump near you: here in the UK gas is around 1.06 pounds/liter (the equivalent of $8 a gallon). The entire country is still choked with traffic, everywhere you go.

My advice: get a bike.
posted by crazylegs at 7:22 AM on May 5, 2008

Here in Florida, there has definitely been an economic downturn with serious, far-ranging consequences. Not all of the problems in the Florida economy are attributable to the national economic downturn, to be sure, but among other things, Florida has been hit pretty hard by the bursting of the real estate bubble.

My wife works as a real estate closing agent, and she’s seen demand for her services drop dramatically over the last two years or so—I’d guess the volume of new real estate business at the firm she works for has decreased by more than half.

Plus, there have been massive state budget revenue shortfalls that are forcing huge cuts in public services in Florida (much of that is due to Florida’s insanely regressive tax policies and the general mismanagement of our state government, but a lot of it is due to the broader economic situation as well).

Tallahassee, where I live, has been especially hard hit because state government spending makes up a huge part of the local economy. Many of the local IT service providers and other government services vendors have seen significant layoffs recently, and new work is getting scarce.

With the most recently adopted budget, the Florida education budget has been cut by $2.3 billion—this at a time when the Florida education system is ranked somewhere around 49th in the nation. School nursing programs have already been eliminated, with PE, art, music and many other extracurricular programs now on the chopping block. We're also seeing enrollment freezes at most of our public universities as a consequence of Florida's economic woes.

And that’s only one aspect of how Florida’s economy has been impacted. Mosquito population control programs (which are a serious public health concern in a state like Florida, where insect-born diseases have historically represented major public health challenges) have been all but eliminated in many areas, which is bound to lead to long-term increases in Florida's health care costs. Other basic services—even law enforcement services, which are a sort of sacred cow in Florida politics—are seeing drastic cuts.

And all of the above now seems to be contributing to a more general cascade failure effect: As state revenues shrink and public services and infrastructure decline, the revenue base shrinks more and services decline further.

The decline in Florida’s education system threatens to have particularly long-range consequences as the state increasingly finds itself unable to attract and retain the kinds of highly-skilled workers that contribute most to economic growth (recent efforts on the part of the legislature to bring more religion into the public sphere, including measures allowing the teaching of intelligent design as an alternative to evolutionary theory in Florida schools only threaten to further exacerbate this problem).

So yeah, I’d say we’re seeing real consequences here. And all these effects are now only just beginning to play out and I expect they will continue to play out for a long time to come.
posted by saulgoodman at 7:27 AM on May 5, 2008 [2 favorites]

The specific food thing that has caught my eye is the price of asparagus: it has stayed up around $2.50-3.00 a pound when normally it would be around two bucks this time of year.
posted by Lentrohamsanin at 7:44 AM on May 5, 2008

So in the middle of all of this stuff I actually moved to the US from Canada. Housing the San Francisco Bay Area is down but not everywhere - the neighbourhoods where I have been looking for a house are up in terms of average price year over year. Partly that is due to low inventory levels and partly it's due to a steady stream of new residents flowing into high-tech companies in silicon valley. But yeah, gas is $4 a gallon and food prices seem higher. It will be interesting to see how easy or hard it is to find a contractor if I need to do renovations after I buy a house. But in some areas housing remains even. Outlying areas around here and the less wealthy areas are seeing huge foreclosure rates - like over 1 in 150 homes. But the market is definitely flatter than it would be otherwise.
posted by GuyZero at 7:46 AM on May 5, 2008

I work for an international company with a US branch. We recently acquired another medium sized company, and management chose to send the new work and related jobs to the US (which meant both new hires and promotions/raises for existing employees). I don't know this for sure, but I suspect that the weak dollar had something to do with the decision. The industry I work in is probably a bit unique as we're not as dependent on gas, oil, or food prices... although we are "exporting" goods, we're really just exporting information. So in this limited context, the downturn has actually had a small positive effect (at least initially).
posted by OrlandoFurioso at 7:50 AM on May 5, 2008

The company I work for has let a few people go, and if this continues long, I wouldn't be surprised if there wasn't more. Food is definitely way up in price, even on small things.

Gas doesn't affect me much as I bike or walk to work, but it's put my wife in a worse spot. She has a pretty long commute and our gas-friendly car was recently totaled when it was parked on the street. Now she has to drive our gas hungry mini-van, and it's hurting our bottom line.

Personally, the other effect of the rising cost of gas has been that I'm less likely to drive to the other side of town. Going 12 miles both ways used to be nothing to me, but now I have to have a really good reason to justify it.

Our landlord can no longer afford our property and is attempting to sell it for development, so if he does find a buyer, we'll have to move (though we were planning on it in October anyways).

Up the block, there are houses that were sold and then fixed up last year, I'm pretty sure someone tried flipping them as they are now up for rent as "luxury apartments" with jacuzzis and other things featured on those house flipping shows.
posted by drezdn at 8:03 AM on May 5, 2008

Gas prices are higher, so it costs a bit to visit a friend in another city, but barring that I only need to fill up my (10 gallon) tank once a month. I haven't noticed any food-price issues at all, but I've been dieting so I haven't had to buy much food.
posted by delmoi at 8:09 AM on May 5, 2008

I currently live with my parents and am making plans to move out (somewhere before the beginning of the next school year, hopefully). As far as this whole thing affecting me, I play a lot more for gas than I like too (but it's not really a hardship yet, considering the fact that I'm lucky and have a very short commute. As in 15 minutes.)

My parents, who I live with, have been noticing that their retirement plans are currently in the crapper, which hasn't been making my dad happy because my mother retired in March and he's planning on retiring in January.

The biggest thing for me personally is that I'm very hesitant to just run out to the store. Driving has become something that has to be planned, rather than a spontaneous exercise.

My single parent friend has been hit much harder than I have, mostly due to the fact that she lives in a very small town without many job opportunities. I'm lucky to have gotten a reliable and very steady job before things got too terrible. My biggest concern is getting fucked on the commute when I move.
posted by sperose at 8:22 AM on May 5, 2008

there have been massive state budget revenue shortfalls that are forcing huge cuts in public services in Florida

The state and local governments are hurting even more for badly needed funds due to this, and because Charlie Crist's solution to everything, including (hypothetically) taxes being too low, is to cut taxes. Of course, now that there's less money for public services, you'll have thousands of people having to fend for themselves or help out their loved ones because the state no longer has the money to do so.

If you have to quit your job or cut back your hours to care for your kids or your parents, it's going to hurt that much more.
posted by oaf at 8:51 AM on May 5, 2008

My household consists of two child-free adults with white collar jobs. The economic downturn has not affected us too much right now, however my current employment is grant funded and will end in 18 months. With this in mind and assuming I might have to relocate, really hunt for a job or take something part time, I've been aggressively paying off my student loans and socking away as much money in savings as possible. Other than that, my household lives very frugally anyway. We take public transportation, ride our bikes, buy our clothes at thrift stores and have a big vegetable garden.

I think more than anything the economic downturn has caused me to worry about family, friends and community members who are already living paycheck to paycheck and hand to mouth. My neighborhood recently lost our grocery store so that the company (HyVee) could open a new big store in a more wealthy part of town. So not only do we have a large abandoned, blighted business, but elderly and low-income people are having a hard time getting to the grocery store on a regular basis and are buying their groceries at places like Walgreens drug store and convenience shops.
posted by pluckysparrow at 9:10 AM on May 5, 2008

As a New Yorker who never drives anywhere, I can only attest to the job market: my friends and I are all very well-educated and driven, but only a few of us have stable jobs, and only one friend enjoys health insurance. We're all using our willingness to sacrifice health care as a bargaining chip when going into interviews, and a lot of us have lost seemingly stable positions with little to no prior notice.

Anecdotally: my friend works at the Nordstrom's in DC and laments the low customer turn-out on weekends--no one shops for designer purses and clothes anymore. Meanwhile, shoplifting incidents have doubled over the past year.
posted by zoomorphic at 9:16 AM on May 5, 2008

I don't think anyone mentioned heating costs. I have a gas furnace at home, and the price of gas has gone up ten cents per therm every month for the last five months. It is now almost double what it was at the beginning of last winter. That's OK, because it's May now and no one is using the heater, but I think many people will be in trouble if the price stays this high through next winter. A lot of people around here (northern New Mexico) are already on an assistance program for people who can't pay their heating bills... double the current cost is going to hurt. I'll bet the guys who install wood stoves will do well this year.

Other that that: yes, food prices are increasing fast. Some of the produce prices (example: green peppers and green onions) have doubled in the last 6 months, and about 50% of that increase happened in the last month. Green peppers went from 89 cents three weeks ago to $1.25 today! Milk and dairy is another category in which prices have just about doubled over last year's prices. Also, the local burrito place had to raise all their prices by 50 cents, because their tortilla supplier had to raise their prices. This is because grain prices are going up -- wheat flour is expensive, and some stores are limiting the quantity of rice customers can buy at once.

Meat has stayed reasonably cheap, but I expect that the grain shortage will begin driving up meat prices very soon. When that happens, we may see a lot more hardship; I suspect that poor & middle class families have been substituting affordable meat for the more expensive veggies and dairy.
posted by vorfeed at 9:28 AM on May 5, 2008

I work in a large, multinational company. As our clients typical budget us as marketing, all the upstairs folks are a bit twitchy and some of our larger, long term clients have cut or cut back programs with us. It's more of a wait and see than a genuine impact that I can tell. News from friends at ad agencies, however, seem to be having a rougher time, as expenditures are down there, and that's often the first industry hit.

We've had an influx of non-US companies using us as the dollar sinks, but we're seeing price pressure on bids with US firms. So, some departments are slow, but most are keeping busy. There haven't been any layoffs, nor do I expect any.

While I was traveling on business, the car service driver mentioned that they've been booked solid - if there's a recession, businesses are still managing to travel to sell - and they're likely selling harder. However, it hasn't reduced the number of people in the Admiral's Club at SFO.
posted by Gucky at 9:38 AM on May 5, 2008

The economy hasn't affected my daily life, and I haven't really noticed anything (knock on wood) except that gas is more expensive and my portfolio's gone down a few percent. The only people I know personally who seem to be affected are those who are trying to sell houses--it's tough to do in this market. The job market in my field (software) seems to be as brisk as ever.
posted by phoenixy at 9:40 AM on May 5, 2008

Most of my clients are marketing/ad agencies. Luckily, these same clients are making an effort to invest in visibility programs partly due to the economic climate; I've had good solid work, even though sometimes payment is slow. Part of the slowing-economy domino effect is delayed payment ("I've got to get paid by someone before I can pay you" hand to mouth action). My husband also freelances, and he's had much of the same.

Gas and food are up, for sure. Luckily, working from home encourages limited consumption of gas; food is my greatest pleasure, probably, so we've just sucked it up.
posted by sadiehawkinstein at 10:16 AM on May 5, 2008

Like a good chunk of MeFi New Yorkers, so far it hasn't been much more than something I read about in the newspapers/on the web. I'm probably a little better insulated than many people - no kids, no mortgage, no car, and I live in a small apartment in an unglamorous part of the city, but I haven't noticed friends with the usual trifecta of big expenses (kids, mortgage, car) quaking in their boots. If/when the wall street layoffs start, I can see it getting ugly quick as the press will start freaking out and depressing people who don't work in finance as tax revenues drop.
posted by Calloused_Foot at 10:22 AM on May 5, 2008

I grew up in the northern San Joaquin Valley of California, one of the hardest-hit areas in the country. Public services are being cut back and the forecast is that
recovery is unlikely until 2012.

I don't live there any more, but here's the story of a family friend that is far from unique: He's a Mexican immigrant who worked in construction (the SJ Valley was becoming very desirable as a cheap bedroom community for workers commuting to the San Francisco area) and mistakenly bought a house on an adjustable-rate mortgage, barely making the monthly payments...until last year, when the payments shot up at the same time that the construction industry ground to a standstill and he got laid off. I hadn't heard whether he's been evicted yet, but it's bound to happen.
posted by kittyprecious at 10:24 AM on May 5, 2008

The biggest challenge for me was the cost of propane in January--the propane company wanted $765 for the minimum delivery of 200 gallons. Instead of using wood as supplemental heat, I turned off the propane furnace and went completely to wood. I saw neighbors using lots of wood, too, including lower-quality stuff that normally we would leave alone or at least try to season properly.

I've noticed higher gas prices but I don't drive much. My internet-based business is picking up nicely, but I'm concerned about the costs I'll have when I go to a conference in Europe this winter.
posted by PatoPata at 10:28 AM on May 5, 2008

I'm loosely associated with the wine industry in the US. We mostly work with European wines, so the weak dollar and general inflation have proved to be quite difficult. We are seeing pricing rise dramatically - sometimes as high as 40%. So far, the we've been okay, as we have enough supply on the ground domestically to last us about a year, but if the dollar doesn't improve we're going to need a new business model. Sales are still strong, but everyone is getting worried.

Talking to people in restaurants and wine shops has brought up some interesting anecdotes. Sales of mid-level wines ($25 to $50) has dropped precipitously, while low-end and high-end sales have risen. One person explained this as 'the middle classes are cutting back, but the upper classes are still spending.' I've been wondering if the high-end will improve over the next few years - fewer people traveling to Europe and more of them spending money on locally available luxury goods.

In terms of my personal finances, well, again things are fine. We won't be house shopping as the local market is still crazy overpriced. Instead of dropping the asking prices of houses, people around here are just taking them off the market and waiting things out. Which is probably prudent.
posted by elwoodwiles at 10:28 AM on May 5, 2008

I was laid off from my job while and we're trapped in a house we don't want because we're close to underwater on the mortgage and nothing's selling in our area.
posted by libraryhead at 10:48 AM on May 5, 2008

Are MeFi members really finding it tough?

Nothing tough here. I don't own a car, I rent (and as far as I know, the family that owns this house has owned it for years and probably owns it outright), food is a little more expensive but it's nothing I can't afford. The market is down, which has dropped the value of my IRA, but like Warren Buffet said, this is only good news for young investors like myself.
posted by ThePinkSuperhero at 10:51 AM on May 5, 2008 [1 favorite]

It isn't really affecting me that much, actually -- because I've spent the past 5 years recovering from an even bigger personal economic downturn. I work in theater and have a "day job" as an office temp, and opportunities for both COMPLETELY tanked in the months following 9/11. The only work I was able to get throughout 2002 was part-time office work for a university, and my income dropped 75% in that one year. I supplemented it with cash advances on my credit card, to the tune of a few thousand.

It's taken me 4 years to get out of that financial hole, but I'm nearly out -- and it's also ground some fairly frugal habits into me (I don't eat out very much at all, I rarely see movies, I have a very small clothes budget). So now that the rest of the economy is taking a downturn, it's old-hat to me. I'm actually doing a little BETTER than I was last year, and am actually starting to be able to afford more "fun" than I was a few years ago. It's everyone else that's trying to learn the lessons in frugality that I learned already, so I'm just shrugging and saying, "...so I do my own laundry rather than dropping it off at the cleaners'. Yes, and?"
posted by EmpressCallipygos at 11:33 AM on May 5, 2008

I came close to finding it really tough - I was laid-off early last month, but luckily found a position soon thereafter. I consider myself to be really, really lucky, especially in this job climate.

Echoing the majority of people, I've had to allow for a larger food budget. Granted, I live in a neighborhood where food prices are generally pretty low, but when all of the food shops and bakeries start to raise their prices by a quarter or 50 cents, you really start to see it add up.
posted by chan.caro at 11:34 AM on May 5, 2008

well, on a more personal note, while i'm still employed myself, and though i even got a fairly substantial raise (more than 5%) earlier this year, the company i work for has had three rounds of layoffs over the last year. also, my company's health care plan now requires a substantially higher employee contribution than in the past (for family coverage, which i need because my wife and son would otherwise be uninsured, it's about $800 per month off the top of my take-home pay). plus, with the increasing fuel and food prices, our monthly budget has taken a pretty hard hit. since our son was born a little less than 2 years ago, we've significantly reduced our discretionary spending (we almost never go out anymore, except for occasional meals out, wheras we used to have a very active night-life), but we've recently started running out of disposable income roughly halfway through the month. we've even been forced to use credit to cover emergency medical and other unexpected expenses on a couple of occasions, despite otherwise towing a hard-line on credit card expenditures. in the not-so-distant past, we usually had a couple of hundred dollars left free and clear at the end of each month, but those days are gone and our savings have virtually been wiped out (we still have an IRA, but it's lost a lot of ground over the last couple of years, too).
posted by saulgoodman at 12:40 PM on May 5, 2008

I don't think I've seen much of an impact here in Seattle or personally.

Food prices are up indeed. A week's groceries used to be $90. Now it's $120. And we've adjusted -- less meat, more pasta.

Gas prices increases here have slowed. If we had a longer commute I think we'd feel the pain, but I usually only need to gas up once a month as is. I'm considering whether to replace my car or whether I should even replace it and go to an all bus commute.

Job-wise... I feel secure, but I don't know if I am secure. My wife's job is pretty safe too, but again, unsure of the security. I was really shopping for a new job last year, but now I've really backed off because we don't know what's next.

Seattle housing prices have stabilized and fallen back a smidge (about 1%). Rent, though, is up 10%, and it will likely go up another 10% next year. We negotiated a small rent increase with the landlord in hopes of good faith dealings in 2009. OTOH, we should be in a position to buy in 2009, finally, job status willing, so we might just jump out and buy-and-hold.

Seattle's economy is slowing, but it always lags behind everywhere else. Everyone is in a real wait-and-see mode.

And oh... $1.29 green peppers? I don't think I've seen one here in town less than $1.99 in a long, long, long time.
posted by dw at 1:00 PM on May 5, 2008 [1 favorite]

Food prices are notably higher, which effects how much meat and fresh produce I've been including in my diet.

To check in on the real canary in the coal mine, though, have a look at your local soup kitchen/food pantry: at the one where I volunteer, the demand has hit a record high, and there's an increased number of working families and the elderly showing up for dinner. This past fall, the pantry briefly ran out of canned goods.
posted by availablelight at 1:32 PM on May 5, 2008

The rent increases I keep hearing about are interesting. I've been told this is because people are losing their houses and moving back into the rental market. This doesn't add up to me, as there are very few houses in foreclosure in my area. I want to argue that rent is rising because there are fewer available units, not because of demand, but but because so many units have been converted to condos and now sit unsold and unoccupied. Same with rental houses, many of which were recently put on the market and now also sit unoccupied.
posted by elwoodwiles at 1:33 PM on May 5, 2008

Ack. I guess fewer apartments, same amount of people do represent an increase in demand, but ya'll know what I mean.
posted by elwoodwiles at 1:34 PM on May 5, 2008

Well, three of my uncles have lost their jobs in the last six months. Retail, auto industry, and telephone company, and they'd each been in about 30 years. So that's a scary data point.

My own (part-time) jobs are dependent on private schools/colleges in a way that insulates me pretty well. That said, I have to be pretty frugal because it's hard to find additional work.

We already keep the thermostat low in winter, don't have AC, use CF bulbs, etc. Hardly ever eat out--our one regular indulgence is pizza from the place around the corner, but a large with a couple toppings just rocketed from $13 to $18 to make up for the price of flour and other ingredients, so that's out the window too.

In some parts of the western US, people are hoarding rice and stores are limiting how much customers can buy.
posted by hippugeek at 1:34 PM on May 5, 2008

I want to argue that rent is rising because there are fewer available units, not because of demand, but but because so many units have been converted to condos and now sit unsold and unoccupied. Same with rental houses, many of which were recently put on the market and now also sit unoccupied.

In Seattle, all the above is true, but there's an added factor of Seattle still being a place for younger people want to move to, so there's still demand for apartments.

So demand remains high, which means that you can put your house on the rental market and make up most, if not all, of the monthly payment for your underwater mortgage.

I expect the market will balance itself out in the coming year as Seattle's economy slows.
posted by dw at 2:16 PM on May 5, 2008

I work in a used book and music store and we're seeing a lot more people than usual for this time of year bringing in used books and DVDs for gas money. The bossman and I were talking about it the other day and he said it was just like this in the 80s.

Food prices are notably higher, which effects how much meat and fresh produce I've been including in my diet.

Huh. I'm mostly vegetarian and haven't noticed much of an increase in fresh produce prices. Maybe that's just the early summer harvest keeping things level. Bread, veggies and beer haven't increased much at all, far as I can tell, though egg prices have climbed dramatically. I bike everywhere so the gasoline doesn't bother me directly at all. Natural gas is going up, though, which will be bad for next winter, and the electric company wants to charge more, but that's to pay for its new proposed nuke plants.

I'm planning now for really big natural gas bills next winter.
posted by mediareport at 2:30 PM on May 5, 2008

I work in a for-profit kennel/animal shelter in between classes at school. In the past six months, the number of "abandons" (that is, people who bring their dogs in for weekend boarding or obedience training but then leave and never return) has gone up significantly -- from zero to several.

We've also received credible reports of dogs being found locked in abandoned/foreclosed houses -- dead from starvation. People are loosing their houses and leaving their pets inside to die.

A house across the street from my parent's place (in a nice, upscale neighborhood) has been abandoned for nearly a year.
posted by Avenger at 3:13 PM on May 5, 2008

In some parts of the western US, people are hoarding rice and stores are limiting how much customers can buy.

This has been overblown. It's Costco and Sam's that have put the limits on purchases, and it was mostly due to hoarding by a small group. Smaller stores and Asian food stores have reported no real issues.

Most of the supply problems have been with imports, e.g. basmati and jasmine rice, since the export market is getting curbed by government restrictions.
posted by dw at 3:15 PM on May 5, 2008

I live in Richmond, VA and the recession really hasn't affected me at all. Gas prices are up, but since I live and work in the city, I bike around or ride my moped. I do have a car, but I don't have payments on it. I bartend during the day, during the week and I haven't really seen a decrease in business, money has been about the same. I guess no matter how bad things get, people will still want to drink a beer. I'm moving in a few months and have been shopping around for another apartment and it seems to me like the prices are just about the same, maybe slightly higher, but nothing of any significance. I also don't really pay attention to food prices, so I couldn't tell you whether or not those have increased.
posted by MaryDellamorte at 3:47 PM on May 5, 2008

Here's local newspaper coverage of how it's playing out in this area.

But read it fast, because the New York Post says the local newspaper here is in financial hot water themselves.
posted by gimonca at 5:10 PM on May 5, 2008

Not really. My husband's business is actually picking up a lot more lately. We're looking to buy some bicycles to have some cheap outings without using the car so much this summer, though. The thought of paying $4.00 per gallon this season is not very welcome, but I could use the exercise from biking and walking. I'm an awesome shopper, so I just got a ton of clothes at a local department store for 80% off on clearance last month. I generally buy veggies that are in season or on sale, and I know how to make an inexpensive piece of meat come out tender (i.e., pulled pork from a cheap pork butt). But it's not anything new for me, I don't normally buy $11 per lb. pieces of meat out of principle because that's way too damn much to pay for that stuff. I go to Whole Foods once a month and look at their meat prices and move along to my regular grocery store.

If things really get bad, I know how to scrimp even more. We've got so many used clothing stores and discount stores around here we'd be hard pressed to say we can't afford anything. The grocery store has generic or store-brand canned goods and frozen goods, as well as a dry bulk foods section, so we could still eat quite well on very little money.

For housing, we rent and our heat and water are included in our rent. We only pay electric for our lights and stove, as well as cable TV and phone. I hear people had a wicked hard time with their heating bills up here in Maine this year (they have govt programs to help them but I don't know if all people qualify). Maine has an excellent medical program for people who can't afford health care.

Lots of new condos being sold in Westbrook, 10 minutes out of the city. People are buying them, too. These are in old converted factory buildings and I hear about $240,000. I do know someone who just sold his deceased mother's home for a bit less than they'd wanted, but it did sell. Think the city could use a little more money in their budget though.
posted by Marie Mon Dieu at 6:12 PM on May 5, 2008

A couple of my career counselor friends were noting that students are having a harder time finding jobs, but hopefully it will get better before that 6 month grace period ends and the student loan people come calling.

Also for students in community colleges these food/gas prices are the difference between affording the semester or not.

Also, for my parents, on fixed income, it's bad. The elderly got hit with need it to live medication costs and limited health insurance for the past few years, so there's less wiggle room when heating and food prices go up the same time, and your dividends are in the toilet and ability to earn more - limited. And their rent just went up.

Truck drivers - suffering from gas, and the prices of all commodities will rise based on that alone. My friend in construction can't find work.

Certainly for many of us it's switching from luxury to non luxury items, but for some of us who were already perched the edge of the poverty line, this is just the little shove to push us over the line of heat and food and medicine, and heat OR food OR medicine this month.
posted by anitanita at 10:13 PM on May 5, 2008

Thanks for all the comments, I'll check back again later too. I hope those doing it a bit tough turn out OK.
posted by bystander at 12:41 AM on May 6, 2008