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Slowing of the Deepening Recession

A slowing of the deepening recession is not the same as coming out of the recession. It’s important to remember that simple fact. I’m kind of harping on this in recent posts, because it appears that the media and administration are at times trying to spin us into believing that everything is getting better. It’s not. It is just not getting worse as fast as it was before:

U.S. home prices continued their multiyear tumble in April, according to the S&P; Case-Shiller home-price indexes, which showed their third-straight month of slightly smaller declines.

Meanwhile, U.S. consumer confidence retreated in June, especially regarding expectations for the economy six months from now, a report released Tuesday said.

Remember that when consumers are not feeling confident, they don’t go out and buy. We have only two months left until the holiday buying season starts (back to school followed by holiday shopping). With consumer confidence continuing to fall, we can expect more people to sit on their money.

I wouldn’t be surprised if, on top of everything else, this leads to more declines in gross receipts taxes at the state and local level in New Mexico. If that happens, we can expect a special session where tax increases are pushed. I wouldn’t be surprised to learn that polling is already being conducted to determine the type of tax increases New Mexicans might support.

Let me just say now, if anyone calls you, the answer should be, “No, tax increase.”