In a metropolitan area as large and diverse as San Diego’s, the human eye is not going to pick up a recession looking at parking lots and restaurant crowds. Remember that in a recession unemployment might increase by 2-4 percentage points. You’re not going to “see” that. The economy might decline by a couple of percentage points per year. You’re not going to “see” that. But a business that has a 5% net profit margin and sees sales decline by 5% is going to “feel” that big time because their costs probably increased despite the decline in sales. As I often like to repeat here, “Everything important in economics happens ‘at the margin’.” The “margin” is not typically visible to the naked eye in terms of crowds, etc. But it shows up in the reported numbers, whether tax rolls, profits, etc.
One area that the naked eye does “see” the recession is in housing. The foreclosure signs, closed up mortgage/real estate offices, etc. are visible. That’s unusual. And it shows you just how bad things are eventually going to be.
