The Economic Recovery of 2009: The driver behind the whole economy is You, The Consumer

Wed, 08 Apr 2009 15:07:12 EST

The driver behind the whole economy is you, the consumer. And everywhere you look, the media will remind you that we are "supposed" to be in a depression. So let me share some things with you.

Have you ever heard of the CPI, also known as the Consumer PriceIndex? It's actually the measure of price changes in OUR world...youknow, how much more do groceries cost...gasoline...things we use everyday. It's also the measure often used to guage raises each year, howmuch social security checks will go up the following year.

With me so far?

With the price of oil dropping from $147 per barrell to under $40,the CPI has dropped four straight months. Let's put this in perspective.

The drop in oil, alone, has created a $300 billion increase inpurchasing power for the US consumer. Think about it, this is the sameas putting an economic stimulus check in every consumer's hand. If (inthe last 4 months) you've been spending $75/month at Exxon Mobil -instead of $200/month, that's $500 in your pocket (4 months X $125, thedifference).

That is technically more money that can be spent or saved elsewhere, right?

In fact, average weekly earnings have risen three percent over the past few months.
That news is a very big deal - something very few are talking about.

Who else benefits from this? Any business that uses oil in theproduction of goods. There's tons of them. In fact, many companiesare seeing significant drops in production costs across the board, notjust from oil prices. When things cost less to make, companies becomemore profitable. And higher profits turns into earnings.

Stock markets like earnings.

The downside to a drop in CPI is this: anyone who expects a raise -based on the Consumer Price Index - may probably not see one. Likewise, some Congressman or Senator will be grandstanding when allthe senior citizens in his or her district don't get an automaticincrease in their social security checks. Watch for that.

The pieces are being put in place for recovery.

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The Economic Recovery of 2009: The driver behind the whole economy is You, The Consumer