By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big stories of the week. I'm Maxine Shapiro with KERA Marketplace Middays.
This is a hard one to figure out. Economic data released today should have been positive. It verified that inflation remains tame, thereby allowing Greenspan and Company to keep interest rates where they are. I actually heard one economist, under his breath, suggest that maybe the Fed might be forced to cut the already 40-year low short-term rates. But see, that's not really the problem. Interest rates are cut to entice consumers to spend. And it's worked. We've held up our end of the bargain, buying what we can. Now the mission is to encourage corporate spending. But how? I remember back in January listening closely to CEOs at their CEO annual convention in Boca Raton, Florida. Economists, analysts, and consumers were all jubilant the economy was recovering at the rate it was after the recession, after September 11th. But the CEOs...now they were different. They still had this tone of pessimism.
They were doing the layoffs and they were, and still are, tightening the purse strings, waiting for revenues to pick up. But someone has to start spending for revenues to increase. Say I'm a corporation and I'm waiting for other corporations to buy my product. For me, I need to see money coming in before I start spending, buying other company's products. But they're doing the same thing - sitting on their hands. And no one is spending. Maybe for good reason, no one wants to go into debt or have to expand their debt. So, back to the original question: how do we promote corporate spending?
A good portion of corporate spending includes the workforce. And Dallas-Forth Worth got the news they sensed but hoped wasn't true. As reported online at the Dallas Business Journal, June unemployment swelled to 7.5% in the Dallas area. That was a ten-year high. And in Fort Worth/Arlington - to 6.4% - the highest since January 1994. But statewide, unemployment was down.
It will take time for our area to come back. And it will take innovation - new ideas, new businesses. Stay healthy and happy. I'm Maxine Shapiro with KERA Marketplace Middays.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.