Indicators! We got indicators!

As I mentioned in yesterday’s post, I think it’s a good idea to have a list of economic indicators that you keep up with. It doesn’t have to be anything formal or have a lot of process to go with it. I know that mine are very informal and I’ve gotten so used to keeping an eye on these things that it’s just second nature now.

My list looks something like Charles Hugh Smith’s list, but I generally watch mine for indications on the local rather than the national economy. I’ve tuned them over the years, because some of the things I used to think were great indicators turned out to be not so great. This isn’t the inclusive list, but I hope it gives you some insight into the things you might want to watch.

1. Business closings and/or sales: This equates to numbers 1, 2 and 4 on Smith’s list. When you live in a small town, you’re easily aware of every business that opens and closes, and the sale of a business is an event worthy of the local newsrag’s notice. When I start seeing businesses close, my ears perk up. In a small town it only takes a very few closing to start things moving in the wrong direction. For sales of well-known establishments, more than 2 per year should raise an eyebrow.
2. Delayed home sales, few/no new home starts and apartment rent and occupation numbers: This equates to number 7 and a bit to number 6. When I start noticing “For Sale” signs staying in yards for an inordinately long time, say 6 months, I start paying a lot of attention. When you go months and never see a new house started, that’s a cause for concern. When rents are static, when there are any giveaways (“throwaway” or not) and when apartments go unrented for months, that’s something to investigate. It could just be people are buying houses or would rather rentsomething. Or it could be people aren’t setting up new households, which something else entirely.
3. Numerous large tracts of undeveloped land for sale: Number 6 again with a light sprinkling of Number 8 for flavor. In my AO, a large tract of land is as little as 10 acres. (Welcome to the heavily populated eastern US.) A really large one is 100 acres and you rarely see anything over 200. When these things start coming up for sale in numbers, especially if they have been timbered and are then put up for sale, it’s close to a Red Flag warning. Most people who have land like that aren’t interested in selling if times are good or even mediocre-they can always lease it out for hunting and make enough to pay the taxes. Even bad times will only bring up so much, but if you seeing enough as as you’re driving to say “Hey, that’s the x-th one I’ve seen,” then bet there is something going on that you don’t know about. Find out about it.
4. Boys parting with their toys. This is Number 8 but around here, it isn’t Porsches. We have a rule of thumb that if you want a boat, and RV or a four wheeler, wait until January-February. That’s when all the guys who overdid it on Christmas have to sell them to pay bills. Ditto gun shows during that period. However, if you’re seeing an inordinate amount of them during the summer, or four wheelers just before deer season, or yards with more than one toy with a “For Sale” sign on it, then it’s probably not for sale because of Christmas bills.
5. Restaurant business is slow on Friday/Saturday night. Around here, those are the big evening for going to a “sit down” restaurant, and most everyone goes on one of them. If business is slow and it’s not one of those major weekends where everyone leaves town, it isn’t a good sign. If it keeps up week after week, it’s an even worse sign.
6. When you can’t sell reasonably priced useful goods on Facebook Marketplace, Craigslist, LetGo or at the flea market. There is always a market for the cheap used furniture, older-but-good TVs and the like. When there isn’t, it’s a problem.
7. When you can’t sell “nice to have” goods on Facebook Marketplace, CraigsList, LetGo or at the flea market at any price. When you can’t sell that Yeti cooler for $50, the “S” may already be airborne and heading toward the fan.

There are more, but these are the biggies. I only start watching #6 and #7 when I’m seeing disquieting signs in #1-5.

 If you have any interesting touchstones, I’d love to hear them. We learn from each other.