Where Are We headed?

By Andrew Paparozzi
In May 27, 2008

As we return from the unofficial kickoff of the summer season, the question many are asking: Where are gas prices and the economy going? Other than the horrific loss of life and destruction from recent natural disasters, much of the news has centered on tales about pain at the pump or how higher fuel prices are impacting all sectors of the economy. Hopefully, we took some time this Memorial Day weekend to remember all those who have defended our freedom to even worry about the economy, especially those who gave the ultimate sacrifice.

So, what is the current state of the economy? The one thing we know with certainty: It’s not strong. Recent indicators have ranged from dismal all the way up to “not good, but better than expected.” While the debate over recession/no recession continues, the number of forecasts signaling recession is on the rise. However, as we have emphasized at NAPL: Whether we slide into recession or not isn’t the key point. What is significant, especially for the commercial printing industry, is that economic activity is quite weak, being battered by a housing collapse and credit crunch. And the spike in fuel prices is not going to help.

The Bureau of Economic Analysis (BEA) will release revised GDP data for the first quarter on April 30. The data are expected to still show minimal growth—less than 1.0%—following a 0.6% gain the final quarter last year. Are we going to see any down quarters? Perhaps. The evidence is pointing in that direction. But in the midst of all the gloomy data, let’s not totally lose sight of this ray of sunshine: That the economy has managed to keep its head above water despite the significant shocks experienced is no small achievement. It can be viewed as a testament to its underlying strength—a strength that will resurface once we work our way through current difficulties.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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