Economy Improving? Self-Employed Disagrees with Beige Book

On Wednesday, the Fed Beige Book report stated that the United States' economy is improving. Key figures used to reach this conclusion include an increase in the service and tourism economy, Chinese manufacturing, American auto manufacturing and employment in the U.S.. The Beige Book predicts holiday sales surges to be a further indication of an improved economy.

This news comes just days after my home of Knox County, Ohio, reported an increase in its number of unemployed in October to 9.1 percent after a small dip in September. Adam Taylor of local news site KnoxPages stated that Knox County's unemployment rate is slightly lower than Ohio's 9.9 percent - this rate does not seem to indicate an improving economy. Knox County is not a tourist hotspot, and the precious manufacturing jobs in the area are not part of the auto industry.

While the Fed was releasing its sunshine-and-roses report, the Columbus Dispatch relayed the news of Ohio Senator Sherrod Brown asking lawmakers to stay on the job until Congress approves yet another necessary extension of unemployment benefits. It is estimated that 2 million Americans receiving unemployment compensation will lose those benefits within the next few weeks, right before the holidays.

Washington Democrats contend that the economy is still struggling and the unemployment extension could bolster spending. Estimates indicate an economic impact of $1.60 for every dollar of unemployment benefit.

I've been primarily self-employed for more than three years as a freelance writer with a licensed home bakery in central Ohio. While I have had a few part-time jobs during that time, I haven't punched a time clock for anyone else since April 2010. Through this struggling economy, I've had to make changes and expect to make more. I don't see an improvement in my personal economic situation.

In years past, I marketed heavily during the fall and holiday season for my bakery and had tremendous sales of pies, gift baskets and cookie trays. In 2007, I baked more than 30 pies for customers for their Thanksgiving dinner. This year, I had orders for five pies. I was successful with a niche market, but as the economy has suffered, so did my business.

I saw the downward trend through this past summer. I built this business specializing in artisan-style breads with an average price of $3.50 per loaf at area farmers markets. Many times, customers mentioned that my prices were too low. I knew exactly what my cost per item was, and, to be honest, my profit margin was at least 50 percent of the retail price. In the summer of 2010, things changed.

The same customers who bought 300 loaves of artisan-style bread every week could no longer afford it. My neighbor's chickens were getting fat from the leftover bread I traded for eggs. The customers wanted my products, they trusted me and my kitchen, but they needed a less expensive item. We began making plain white bread, dinner rolls and cinnamon rolls. We carried many more items to the farmers markets and doubled our man-hours in the kitchen. The resulting sales were only 40 percent of what I had sold in 2009.

My friends and family aren't buying new cars. Many haven't been on a vacation in at least two years and keep their "tourism" close to home. While the Fed Beige Book says the economy is improving, I've seen a loss in business and the potential to be out of business for good.