As you may have noticed, there's
been a constant drumbeat of bad economic news since the financial
sector began to implode last September. Recessions come and
recessions go, but this one we were told, was different. What made
this recession different was not the size or scope of the market's
correction, but rather that it was the first contraction to take
place in a world of 24 hour news cycles and instant information
where consumers were bombarded with harrowing tales of gloom, doom,
and impending misery. So, in case you missed it, there's actually
some good news out there...
First, there's some
evidence that job loss in the industry has slowed in recent
months. After posting job losses of 27,000 in November,
and 25,000 in December, the food service industry experienced much
lower job losses in the first three months of 2009, including just
9,000 in March.
The People Report Workforce Index,
which measures employment pressures and expectations in the
restaurant industry, leveled off in Q2 after dropping precipitously
in recent quarters. On another positive note, after
declining steadily since Q2 08, the Employment Expectations
component of the People Report Workforce Index rose to 55.4 for Q2
09, indicating expected job growth in the industry during the next
three months. With the exception of Fine Dining/High
Volume restaurants, all industry segments experienced an increase
in Employment Expectations in the months ahead.
Workforce Index: Q2 09
So why the cautious optimism?
As many of you probably already
know, when people feel their disposable income is at risk,
often are the first to feel the
pinch. It should therefore be noted that consumer
sentiment rose to 61.9 in April, exceeding expectations and
marking the highest level recorded since last September.
Wall Street Journal recently noted, "The increase was likely
tied to robust gains in stock markets and increasing evidence that
the worst of the economy's slide into recession may be over...
Wachovia chief economist John Silvia said the report suggests
"better times ahead.""
In addition, while just 19% of
Americans expected the economy to improve a year ago, that number
has risen to 39% today. This attitude change amongst the general
public is undoubtedly the first step towards economic recovery. And
the sooner people feel it's safe to start taking their cash out
from under their mattress, the sooner cash registers will once
again be ringing.