Bernanke, CBI Say Disheartening Things

After the Dow soared over 300 points yesterday, it was hard not to feel optimistic.  Yet American and British authorities have both warned that the bad times aren’t necessarily past.

Federal Reserve Chairman Ben Bernanke came closer than ever to discussing a recession, according to Henry Blodget, and acknowledged that America’s GDP might contract before the first half of 2008 is over.  For small businesses, this could mean shy consumers, rising supply prices, and still harder-to-get loans.

The same sorts of problems are a threat in the UK, too.  The Confederation of British Industry "is revising its growth rate to 1.8% this year, and 1.7% in 2009," according to the Small Business Blog from Microsoft.  "This is gloomier than the chancellor’s recent forecast of between 1.75% and 2.25% growth in 2008.  The recent figures on the growing cost of living seem to be behind this latest downgrade."

Nonessential services simply can’t compete with mortgage payments and groceries, of course, but this makes it all the more important for businesses to stand out within their fields.  Also, a focus on non-local customers could help, since not every county, state, or country will be affected equally.

On the bright side, the Dow is down only 5 points at the moment, and the Nasdaq is up by about the same amount.