Tuesday, May 26, 2009

Consumer Confidence Soars

This is great news. Despite the doom and gloom among economists and the media, the Conference Board today reported an unexpected surge in consumer confidence. In fact, the index reached its higher level since the collapse of Lehman Bros. in September that caused the credit market freeze.

For this month, the index reached 54.9, up from 40.8 in April. Expectations for the next six months rose to 72.3 from 51.0 in April. That's quite a leap.

While encouraging, the numbers are at odds with recent trends. Housing data in 20 major metropolitan areas declined in March by 18.7 percent, according to the Standard & Poor’s Case-Shiller Home Price Index that was released today. Earlier this month, the Commerce Department said retail sales fell 0.4 percent in April, following a 1.3 percent drop in March. Meanwhile the U.S. unemployment rate reached 8.6 percent in April.

Still, the Conference Board gave a rosy assessment of the state of the economy through the eyes of consumers:

"Consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months," Lynn Franco, Director of The Conference Board Consumer Research Center, said in a press release. "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."

Bold words. Let's hope she's right.

Tuesday, May 19, 2009

Fuel Efficiency Standards Take Shape (Finally)

After years of stalled legislation, federal neglect and successful industry lobbying, it appears there's finally agreement in setting a national fuel efficiency standard. The Obama Administration is modeling the regulations after California's effort, which was introduced in 2002 but stalled by auto industry lawsuits and Congressional debates. Now with the auto industry in bankruptcy protection and receiving billions of dollars from the government, lawmakers see a way toward a national fuel efficiency standard. If everything works out, cars will be running an average of 35.5 miles per gallon by 2016. That's more efficient than my Honda Civic Hybrid in the city.

As I've written in the past, most projections show U.S. oil demand within the next 20 years outpacing oil production and current import levels. The most effective way to confront this problem is to reduce demand by either convincing consumers to drive less, or force fuel efficiency standards.

I'm glad the economic implosion has forced the auto industry to do what's right. Hopefully American cars will redefine the market by creating fuel efficient cars that people will love.

Monday, May 18, 2009

Jerry Yang on Recession and Re-Birth

(Photo by Ken Hupp)

Great quote from Yahoo! co-founder Jerry Yang during his commencement speech at the University of Hawaii at Hilo. An excerpt from KPUA.net:

“I can promise you that great things are being started right now in this downturn in our economy. Yahoo started in an economic downturn in the early 90’s,” Yang said. “Other great companies, great ideas, products, even social movements have come about as people are throwing away the status quo and doing everything in new ways.”

According the KPUA, Yang added that "success doesn’t come from a high I.Q. or talent, but a willingness to work hard coupled with relentless preparation."

So true, Jerry. Reminds me of a gigantic billboard I saw last night coming off the Bay Bridge that read something along the lines of "Bill Gates started Microsoft during an economic recession" (from my memory). The next big idea is being conceived in cafes, universities and impromptu get-togethers. Nothing better than a downturn to force people to innovate and challenge the status quo.

Let's hear from you. Have you seen examples of people using their ingenuity in the face of unemployment or setbacks to challenge the status quo?

Friday, May 15, 2009

Retirees: "What recession?"

(Photo courtesy of ted.sali via Flickr)

Interesting report from the Pew Research Center. The study examines the recession's behavioral and psychological effects by age group, especially among older Americans. The conclusion: retirees are handling it much better than younger folk. Those surveyed who are older than 65 were less likely to have cut back on spending, suffered a loss on their retirement investments, or experienced greater stress in their families. Pew calls it a "kinder, gentler recession" for this group.

In contrast, people bucketed in the 50-64 age range feel like they're getting hosed. A large percentage of them reported greater investment losses, familial stress and spending cutbacks since the onset of the recession. This "Threshold Generation," as Pew labels them, is more exposed to Wall Street fluctuations and, not surprisingly, less confident they will build enough of a nest egg for retirement.

The study also points to other factors such as income and race that affect the results.

Maybe this is the reason why my parents are still so stinkin' happy all the time. Perhaps it's their longer-term view of the world and the acceptance that circumstances will bounce back despite the difficulties. My parents grew up during the height of World War II and still have vivid memories of hiding in bomb shelters in China. They decided to leave their families in their mid-20's and settle in a foreign country where they've lived for more than 40 years. They've lived through recessions, booms, busts, oil crises and drafts. And yet every weekend you'll find them singing, dancing and laughing with their friends.

Tuesday, May 12, 2009

Mochas and the Next Google

(Photo courtesy of Yelp)

On the corner of Castro St. and Villa St. in downtown Mountain View sits Red Rock Coffee, a local cafe where I believe some innovative and lucrative ideas are being formed. When you enter, the place looks like any other cafe with its small tables and clusters of customers waiting for their lattes.

Walk up a flight of stairs and you arrive in an open space where a decent sound system covers the tapping of laptops and the hum of conversations. Every time I'm up there working, I wonder if the guys sitting next to me are sowing the seeds for the next Google. Red Rock is just one of many local haunts around the world where big ideas are being created every day. It goes to show that despite unemployment, people are getting out there and taking risks to turn ideas into start-ups. I love the entrepreneurial spirit.

Wednesday, May 6, 2009

The Freelance Economy Is Growing

I stumbled upon some interesting data in this Wall Street Journal article (subscription required). It details the growth of the freelance marketplace based on the number listings posted on job boards geared for matching professionals to temporary projects. Some numbers according to the WSJ:

Between January and March, employers posted 70,500 of these work-for-hire positions on Elance.com and 43,000 on Odesk.com, which represents increases of 35% and 105%, respectively, from the same period in 2008. Sologig.com, which lists remote and on-site freelance jobs, says its average monthly postings have more than doubled to around 13,500 per month in the past year. In March, there were 750 jobs listed on VirtualAssistants.com, versus 400 in March 2008.

This is not surprising. From the people I talk to who are still employed, they face more work and fewer resources due to layoffs. Freelancing seems like a good opportunity for corporations who want to hire workers without paying them benefits. The article also profiles one woman who makes more money as a freelancer than in her previous salary job. Some good news for people looking to make some money while searching for their next full time job.

The article also gives tips on how to get started on freelance sites:

1. Be specific about your skills and expertise.
2. To set your rate, research how much experienced freelancers charge by looking at their profile pages. Then set your rate slightly lower if you're starting out.
3. Start small. Offer a few hours of work to prove yourself.
4. Negotiate your work with employers over the phone. The personal touch adds a level of trust.

Monday, May 4, 2009

Tapping the Skilled Volunteer Pool

I've been trying to volunteer more. So far this year I've hacked away vines and bushes along a San Francisco sidewalk, planted native shrubs in the Palo Alto wetlands, and distributed food to needy families in Daly City. I've learned a lot about ways to serve the community, and the experiences have made me think about the way non-profits are run. I've seen some effective non-profits and some not-so-effective ones too.

Based on my experiences I have developed an idea. Given the state of our economy and number of people out of work, non-profits can improve their operations by tapping the pool of highly skilled workers who are unemployed. There are scores of marketers, salespeople, designers, financial planners, consultants, programmers and engineers are out there waiting by their phones, scanning job boards and wasting away watching Tivo. While finding a job should be their top priority, I think unemployed professionals would jump at the chance to help non-profits if opportunities were presented the right way. Here are some suggestions:

1. Make them easy to find
There are some great online resources for people to find volunteer opportunities. In the San Francisco Bay Area, organizations such as Hands On Bay Area and One Root have searchable databases that allow people to sign up for an event online. Other national organizations such as USA Service are pretty good too. Most of these events are focused on unskilled, but essential, work to help their cause. What if non-profits posted needs for professional services?

2. Offer projects
Demand for professional services should be packaged as projects rather than one-timers or open-ended engagements. Unemployed professionals are afraid to make long-term commitments, fearing time away from focusing on their job search, and one-timers would offer marginal benefit to non-profits. A specific engagement with a clear idea of time commitment and duration would help people balance their schedules and manage their resources better.

3. Build skills
Many unemployed professionals don't realize volunteering can build skills that make them more appealing to potential employers. Let's say a non-profit needs help in building out a fund raising plan. Highlighting the skills one could develop (strategy, negotiation, marketing) offers a clear motivation for volunteers.

4. Give recommendations

Once the project is over, offer to write them recommendations on their Linkedin profile. It's a fair value exchange. They offer skilled professional services for free, non-profits offer an added bonus to the volunteer's online resume.

What do you think? Do you have any ideas about how non-profits can take advantage of this skilled labor glut to help them improve their operations? Write a comment below.