walmart_logo2 Putting a little bit of a damper on all the recession talk, Wal-Mart reported good 4th quarter earnings after refocusing on low prices during the Christmas shopping season. Wal-Mart in particular is a well regarded barometer regarding the economy because of its ubiquitous nature and lowest common denominator demographic. The theory basically is that during tough times, the middle class cuts back on spending thus eliminating one of the driving forces of the economy. Wal-Mart, is the bottom of cutting back. You can’t cut back further than that without leaving the normal shopping economy (used and thrift would be a different type of shopping.). So, if the recession stops at a level above Wal-Mart, then it isn’t too deep. Also, the recovery would hit Wal-Mart first as people get re-employed and move back up the shopping hierarchy, Wal-Mart should be the first to see the benefit. Thus, if Wal-Mart did alright for 4th Quarter 2007, then maybe the recession wasn’t too deep last year. Will it go deeper? Maybe, but until you see Wal-Mart with bad numbers you can count the so call recession as mild.

By the way, we actually aren’t in a recession at all. A recession by definition is two quarters of negative GDP. We haven’t had even one yet. The recession talk is about a “coming” recession. Everybody seems to forget that.

Take a look over at Finance Gourmet where a new article about Should You Pay Off Your Mortgage is up this morning.

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