The mess in Greece will not go away, even though the nation’s parliament voted by an overwhelming margin to accept austerity measures to get a 130 billion euro bailout, its second. Citizens continue to riot in the streets, and there is no reason to believe those riots and protests will stop soon. Of course, for every protestor there is a job left undone, whether that job belongs to a bus driver, shop owner or government tax collector. The more people who are out of work by choice, added to those who are unemployed, the faster Greece’s economy will contract.
Rising Gas Prices
The price of a gallon of regular gas rose 11.57 cents during the past five weeks to $3.51, according to the widely followed Lundberg survey of 2,500 gas stations. A year ago, the price was almost 42 cents lower. Gas prices follow oil prices, although the link is imprecise because of factors like refinery costs and capacity. But they follow them nonetheless. Oil, close to $100 per barrel as it is, will continue to keep gasoline prices high, or even cause them to increase. Economists are divided on what level prices would have to reach to badly damage consumer spending, but for Americans who drive a great deal, 42 cents a gallon is a lot of money.
The National Federation of Retailers expects Americans to spend $17.6 billion on Valentine’s Day gifts this year. The figure is a good barometer of the national consumer economy as its stands now, particularly among people who are married, have children or significant others. According to NRF’s 2012 Valentine’s Day Consumer Intentions and Actions survey, conducted by BIGinsight, the average person celebrating the holiday will spend $126.03, up 8.5% over last year’s $116.21, as well as the highest in the survey’s 10-year history. That number is higher than the NRF estimated improvement of 2011 holiday retail sales, so it may be a sign that the recovery among consumers has improved, at least among men. The survey shows the average male is expected to spend $168.74 on clothing, jewelry, greeting cards and more this year. That is nearly twice as much as women, who are expected to spend an average of $85.76.
Google and Motorola
Google’s (NASDAQ: GOOG) plan to buy handset company Motorola Mobility (NYSE: MMI) probably will be approved by U.S. and EC authorities this week. That will clear the way for Google to become, in part, a hardware company. Industry experts believe that Google wants to mimic Apple (NASDAQ: AAPL), which has had a great deal of success joining hardware and software. Google may not be so fortunate or so skilled. Motorola’s smartphone business is in a state of decline and runs well behind industry leaders Apple and Samsung. The fact that Google will be the firm’s new owner will not suddenly change that. Since Google has shown no expertise in the smartphone business, it may not change it at all.
Douglas A. McIntyre