Daily Record/Sunday NewsYork, PA - Sergio Rengifo doesn't follow the stock market.
The 22-year-old York man doesn't care about gross domestic product or the Dow Jones industrial average, which plunged 513 points Thursday, the worst drop since 2008.
He just needs a job.
His girlfriend works two -- at York Hospital and Colonial Manor Nursing Home -- to provide for their 2-year-old son. Three months ago, Rengifo left his job in the kitchen at Olive Garden, hoping to find something better.
Instead, he files seven to 10 job applications daily, working sparse shifts for a local landscaper.
"It's just hard," he said from the parking lot of PA CareerLink York County Friday. "You just have to keep trying."
While the country added 117,000 new jobs in July, a sudden economic downturn this week has some economists fearing the worst -- a double-dip recession, which occurs when the economy turns sour after a quarter or two of positive growth.
Such a phenomena isn't in the cards yet, but it's "doggone close," said Fred Bergdoll, first vice president at the Manchester Township branch of financial firm Janney Montgomery Scott.
"All that news does make everybody nervous," he said. "We have to remember that we've gone through some very difficult times. If you look back over history, we've seen some very very horrific things economically and politically, and we have survived and eventually prospered."
Slumping stocks this week present lucrative buying opportunities for longer-term investors, "anybody that has money that is willing to keep it committed for the next three or more years," he said.
"I think it'll probably be wishy washy this quarter and hopefully we'll end the year stronger," he said.
History, he said, shows the third year of a presidential term as the most positive economy-wise.
But this week's sell-off negated the Dow's remaining gains for 2011, sending U.S. markets spiraling 10 percentage points from highs this spring.
The news comes on the heels of the U.S. government's deal last weekend to raise the nation's borrowing limit, avoiding a default on some $14.294 trillion in federal debt. It wasn't a magic bullet.
"The United States was a debt addict. The first step toward conquering your addiction is to admit to the problem," he said. "I think that's what we did here. But like any recovering addict, the first step doesn't mean a full recovery right away."
Businesses feel the pain
Meanwhile, gold prices hit a record high of $1,681.74 per ounce Thursday as investors sought safe havens for their money.
York-based jeweler The Watchmaker's Daughter notes more customers electing sterling silver for rings, bracelets and necklaces.
"You've just got to change your product," said owner Karen Staub. "We carry a lot more silver things, and handmade, unique pieces that will hopefully get people to come in, because they won't find it anywhere else. You have to find a niche that sets you apart."
Staub said she doesn't raise her prices to keep up with gold rates, which results in a hit to her profit.
A volatile economy leaves small businesses like Staub's hesitating to seek loans for projects, said Michael Kochenour, president and CEO of York Traditions Bank, which has a lending portfolio of $200 million.
Banks pay interest to customers on deposits into their savings accounts. In turn, they make money from those deposits by lending the money and collecting interest on re-payments.
"If, on an extended basis, businesses feel constrained and don't borrow, there's not an opportunity for us to redeploy those deposits that we're gathering," Kochenour said.
Perhaps as volatile as the stock market were gas prices, which dropped 19 cents per gallon Thursday, said Scott Hartman, president and CEO of Rutter's Farm Stores. Friday, those prices went up between 7 and 8 cents per gallon, he said.
"Every day the markets are moving significantly on some piece of news. It makes it very hard to manage a business based on commodities," Hartman said. "Consumers don't like the volatility. The guy who fills up on a Wednesday and sees the price lower on a Thursday is mad. It adds to the business complexity."
A slump, or worse?
In data released Friday, the country's unemployment rate dropped from 9.2 percent in June to 9.1 percent in July.
Unemployment rates, however, are lagging indicators. By the time they are recorded and compiled, the data is about a month out-of-date.
The country must wait until next month to see if current conditions boost unemployment numbers, said William Sholly, industry and business analyst for the state Department of Labor and Industry.
If the economy is headed for double-dip recession, history could repeat itself. A mini-recession from 1980-81 and a deeper one from 1982-83 could compare to what's taking shape today, he said.
During that event, January 1983 boasted a 13.3 percent unemployment rate, the highest on record for the York-Hanover area, he said.
This July, the area's rates increased from 7.3 percent in June to 7.7 percent. But there's no need to panic, yet, Sholly said.
The relationship between Wall Street woes and unemployment numbers aren't as directly correlated as one might think, he said.
"A bad jobs report can affect Wall Street," he said, "but it isn't vice versa."
Stock plunges can occur instantaneously. Businesses don't react as abruptly, relying instead on long-term outlooks. They don't necessarily lay off the masses after one negative week, he said.
Time alone, Bergdoll said, will tell whether this week's slump is just that -- a slump -- or something much worse.
"It certainly has become something to consider," he said. "Our economists do not see a second recession, although it certainly has become much more of a concern."
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