Viewpoint January 26, 2010, 12:13PM EST

Ask My Wife About the Next Recession

Small business consultant Gene Marks explains why his wife's spending patterns should mean more to business owners than Federal Reserve forecasts

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How do I know when the next recession will occur? All I have to do is ask my wife. That's because women know this answer. Not men.

The Federal Reserve is run primarily by men. That's why it couldn't forecast the recession of 2008-09. That's why, when I attended a recent breakfast presentation by a member of the Philadelphia Federal Reserve, the audience of business owners seemed more interested in the bacon than what he was saying. Sure, he pointed out how 2010 gross domestic product was forecast to grow, interest and inflation were forecast to stay low, and unemployment would start to decline. Sure, he was a nice guy who made lots of good points using lots of complex data. But we were all skeptical. Mr. MBA-from-Wharton couldn't predict the last recession. So what… now we should believe that he can predict the next one?

I know what the Fed needs: more women. Women will tell us when the next recession will happen. Last year, in the midst of the recession, I wrote about some key metrics to watch that would tell us when the recession would end. Well, the recession has pretty much ended. Now our concern is not only how the economy will grow but also when the next recession will occur.

Luckily, I know women will tell us this.

Is She Being Served?

For example, we all know that men could survive entirely on pizzas and ribs forever. But that would kill most of the restaurant industry. My wife, on the other hand, likes to be taken out to dinner. She likes napkins made out of cloth and candles and waiters who pamper her like I never do. That's why the National Restaurant Assn.'s Restaurant Performance Index is a key indicator. This monthly statistical barometer, based on a survey of restaurateurs nationwide, tracks the health of the restaurant industry using factors like same-store sales and customer traffic. Happily, this index has been on the rise since midsummer. A decline in this index means our wives are asking us to take them out to dinner… less. Yikes! Now, this is a big sacrifice for most women, so to do this they must know something about the economy that men don't. Business owners should stop and ponder that before making any significant investments.

Another thing I have learned about my wife: She likes to be served. She wants breakfast in bed. She wants me to rub her feet. That's why it's important for business owners to keep an eye on The Institute for Supply Management's Non-Manufacturing Index. The service industry comprises hotels, airlines, and restaurants, among other businesses driven by women. In fact, the service industry makes up about 90% of the economic activity of the U.S. That's because it's the women who are calling the shots, don't you see? This index recently reached its highest level since spring 2008, so it's clear that all these females are tired of this recession and demand more service. A decline in this index should be a red flag for business owners.

Recently, my wife complained that my beloved Jeep Wrangler was too loud, too bumpy, too leaky, and too impractical for a bald, married guy with three kids. So naturally I replaced it with another, more practical car. I wish I could afford a brand-new BMW but, like most men, I settle for what I can get. That's why good business owners keep an eye on the Manheim Consulting's Used Vehicle Value Index, a monthly barometer of used car prices. It's been rising over the past few months, which, to me, is a clear indication that women are demanding more replacement vehicles from their men. When this index starts trending down it means that the pressure from our wives is easing. That won't be a good sign for the overall economy, either.