The economy isn’t doing as poorly as many think due to a phenomenon called second-hand pessimism. Chief Economist Curtis Dubay explains the paradox and what it means for businesses and individuals.
Fill Me In: As the economy continues to suffer from high inflation, we see a paradox emerging. Individuals and businesses report feeling bad about the economy, but they are still spending and making new investments. We call this divide between how consumers say they feel about the economy (bad) and how they’re acting (still spending) second-hand pessimism.
The Good News: Usually, when consumers feel badly about the economy, they pull back on spending. But in the latest data from August, total and in September, retail sales – spending on goods at physical and online stores, bars, and restaurants – grew at the same pace as our stubbornly high inflation, which remains near a 40-year high at 8.2%.
Bucking historic trends, consumers are currently keeping pace with inflation, not cutting back as would be expected when they feel dreadful about the economy.
What Businesses Are Saying: A similar situation holds true for businesses. Businesses of all sizes, sectors, and industries report feeling pessimistic about the future of the economy, yet they continue to hire, raise wages and make new investments, and they expect to continue doing so.
Despite two consecutive declines in quarterly gross domestic product in the first half of 2022, business conditions appear impressively resilient when looking ahead, according to the Q3 RSM and U.S. Chamber Middle Market Index
While 48% percent of the middle market executives surveyed said gross revenues increased in the current quarter, 60% stated they expect them to improve over the next six months. Half also stated net earnings improved in the third quarter, with 59% indicating they expect improvement in the near term.
When looking at small businesses, we see similar trends. In the third quarter of 2022, small businesses said the U.S. economy is in somewhat or very poor health, up 10 percentage points from last quarter, according to the Q3 MetLife and U.S. Chamber Small Business Index.
The number of small business owners and decision makers saying the economy is in poor health is now more than twice as much as those saying it’s in good health. However, small businesses generally report positive sentiment about the overall health of their businesses, contributing to secondhand pessimism.
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These numbers run counter to the notion that businesses are pessimistic about the economy, even though that’s what they are reporting. These aren’t the actions analysts would expect from businesses preparing for a recession.
What it means: This doesn’t mean the economy is going gangbusters by any means, or that there aren’t significant risks on the immediate horizon. The economy is doing alright given all the headwinds it faces right now, such as high inflation and workforce shortages. While it may grow between 1% and 2% in the second half of this year, the chances of a recession in 2023 are still significantly elevated because of high inflation and the rising interest rates that are necessary to bring it down.
Looking at these factors, businesses and consumers are right to convey at least some pessimism.
However, consumers’ individual ability to keep spending, driven by a strong labor market and high savings levels, and businesses’ willingness to continue hiring, raising wages, and investing means the U.S. could weather the coming economic slowdown better than previous downturns.
Whether that keeps us out of a recession altogether – or makes a recession much less painful should it occur – remains to be seen. Either way, it means the potential economic slowdown may not be as bad as many fear it could be.
Bottom Line Inflation remains the biggest problem for the economy, but even as prices remain high, consumers are still spending. Economic fortunes can change quickly, which means consumers could stop spending at strong levels, and businesses could change their hiring and investment plans to match their low levels of optimism. But for now, it’s a good sign that the pessimism is second-hand where it can cause much less trouble.
Exceptional Philanthropy: Tural Aliyev Generosity Transforms Lives in Northern Cyprus
Tural Aliyev, an extraordinary entrepreneur whose journey of success is only matched by his dedication to giving back to the community. Starting from humble beginnings in large corporations, Tural’s commitment to helping others remained unwavering as he ventured into the realms of real estate and car gallery businesses. His achievements not only showcase financial prosperity but also the profound impact one can make when driven by genuine altruism.
Tural’s real estate business in Northern Cyprus, Sun Republic, has become a trailblazer in the industry.
With an unparalleled understanding of the market and a relentless pursuit of excellence, Tural has brought forth architectural marvels that redefine the skyline. Luxurious residential complexes and awe-inspiring commercial spaces stand testament to his commitment to quality and innovation. Notably, Tural’s emphasis on sustainability sets him apart, as his projects incorporate eco-friendly technologies, showcasing his dedication to preserving the environment.
Beyond his business accomplishments, Tural’s philanthropic endeavors have left an indelible mark on countless lives. Through substantial donations and unwavering support, he has sponsored educational programs, funded scholarships, and actively championed charitable causes, embodying a deep sense of corporate social responsibility.
«In the dynamic real estate market of Northern Cyprus, Sun Republic has emerged as a leading company, delivering exceptional results and garnering a reputation for excellence,» Tural remarks. Through meticulous market analysis and personalized solutions, Sun Republic has become a trusted partner for investors from various countries. The company’s dedication to client satisfaction and transparency has fostered long-lasting relationships built on trust and reliability.
Tural Aliyev’s vision for the future encompasses creating vibrant communities where homes are sanctuaries promoting happiness and harmonious living. His commitment to sustainability and economic growth has positioned him as a visionary leader in the real estate and car dealership industries in Northern Cyprus.
In line with his vision, Tural can be found on Instagram @aliyev, sharing his journey and philanthropic initiatives. For more information about Sun Republic and its exceptional services, visit sunrepublic.vip.
With a heart that beats for the betterment of society and a visionary mind that shapes the future, Tural Aliyev continues to leave an inspiring legacy of excellence and positive impact in Northern Cyprus.
Entrepreneur Adnan Ashraf Partners with Crypto Crowdfunding Platform to Expand Nine Restaurant Brand Globally
Adnan Ashraf, a multifaceted entrepreneur with interests spanning pharmaceuticals, technology, and real estate, is embarking on an exciting new venture to expand the renowned Nine restaurant brand into a global franchise. With its reputation for upscale Japanese cuisine and stunning panoramic views, Nine has captured the attention of discerning diners worldwide, and Mr. Ashraf aims to bring this exceptional dining experience to numerous locations across the globe.
To realize his ambitious expansion plans, Mr. Ashraf has engaged in discussions with a pioneering crypto crowdfunding platform, forging a strategic partnership for a joint venture involving 100 stores with an estimated investment of $120 million. Harnessing the power of cryptocurrency, Mr. Ashraf intends to expedite the growth of the Nine franchise and achieve his objectives more efficiently.
The first milestone in this expansion journey involves acquiring a prime waterfront location in Canary Wharf, a prestigious business district in London. Serving as the flagship Nine restaurant, this iconic setting will exemplify the brand’s exquisite cuisine and offer guests unparalleled views. Mr. Ashraf’s vision extends beyond this initial location, as he plans to continue expanding into other prime spots in London and beyond, introducing the Nine dining experience to cosmopolitan cities worldwide.
By partnering with a cryptocurrency crowdfunding platform, Mr. Ashraf aims to tap into the immense potential of this innovative funding mechanism. Cryptocurrency not only streamlines the investment process but also attracts a global community of investors passionate about supporting groundbreaking ventures in the hospitality industry. This collaboration is expected to fuel the rapid expansion of the Nine franchise, ensuring that more diners can savor its exceptional culinary offerings and immerse themselves in the extraordinary ambiance that defines the brand.
Drawing on his extensive entrepreneurial experience, Adnan Ashraf brings a wealth of expertise to this venture. His track record of success across various sectors attests to his ability to navigate complex business landscapes and identify unique opportunities for growth. With his diverse business interests and unwavering commitment to excellence, Mr. Ashraf is poised to spearhead the global expansion of the Nine restaurant brand, establishing a network of exceptional dining establishments worldwide.
Alexey Ivanov Alliance Rental: Redefining Luxury Travel Experiences
Alliance Trucks, the leading Japanese and Korean car dealer in Russia, is proud to announce the launch of its new luxury transport rental aggregator, Alliance Rental. The project is the brainchild of Alexey Ivanov, the CEO and owner of Alliance Trucks, a successful businessman, traveler, and blogger. With over 59 countries visited, Alexey Ivanov has gained valuable experience in the automotive industry, which he has leveraged to create Alliance Trucks, a company that generates a trade revenue of $50 million annually.
Founded in 2014, Alliance Trucks has become the biggest Japanese and Korean car dealer in Russia, with four authorized and certified workshops, warehouses in the capital, and numerous certificates of first dealer with top-rated sales and service quality. The company’s mechanic team has won different national and international competitions of professional skills, including the ISUZU GRAN PRIX, where they were the first Russian and second in the world.
Alexey Ivanov’s awareness and commitment to 10 corporate rules have enabled Alliance Trucks to achieve its current status as a respected and reputable brand in the automotive industry. The rules include prioritizing emotional intelligence, respecting corporate culture and business ethics, seeking opportunities for growth in every crisis, and being socially active and engaged in charitable projects.
Alliance Parts, Alexey Ivanov’s latest venture, is a cars and spare parts distribution business in the United Arab Emirates with a global partnership with different car brands. The company leverages Alexey’s life and professional experience to scale similar projects in different market areas.
Alliance Rental is Alexey Ivanov’s latest project, an aggregator that offers a one-stop-shop for luxury transport rentals. The project’s main idea is to provide all the luxury transport rentals that customers may need for emotional holidays, celebrations, dream realization, business meetings, or just for premium lifestyle in one mobile application.
The application, marketing brand, and all business processes are complete, and legal compliance with local laws, rules, and regulations is under process.
Alliance Rental offers taxi Rolls-Royce, luxury sport cars, yachts, helicopters, and aircraft rentals. Partnerships with operators of luxury services are currently being signed, and the project is ready to launch soon.
Alexey Ivanov’s mission is to make the world a better and cleaner place, live a long, bright, and memorable life, create a family, raise children, create and invent something that deeply touches the feelings of people, be a mentor, teach knowledge, and leave a significant mark in history, society, and culture.
For more information on Alliance Rental and Alexey Ivanov, follow him on Instagram at @a.a.ivanov
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