Economists pay close attention to the unemployment rate, inflation, GDP growth, and the stock market. But there's another indicator that neatly tracks the direction of the economy: the amount of golf Americans play.
Golfers played about 490 million rounds on U.S. courses in 2012, a 5.7 percent increase over 2011, according to new data from the National Golf Foundation. That's the first sizeable jump in the number of golf outings since 2000. While participation in most pricey activities typically drops during a recession, golf activity has shown an intriguing correlation with deeper economic trends, especially the notable decline in median income over the last decade.
The number of golf outings peaked in 2000, which is just one year after real median income, when adjusted for inflation, hit an all-time high. Since then, the number of golf outings has fallen by about 5.6 percent, while real income has dropped by about 8.8 percent, according to the Census Bureau. (The latest income figures are from 2011, and they may have recovered a bit since then.)
The real-estate bubble that inflated from 2003 to 2006 masked deep trouble in the real economy, and golf course developers got just as caught up in the bubble as housing speculators did. The number of golf courses in the United States peaked in 2004 at more than 16,000. But new golfers never materialized as anticipated.
That led to a glut of courses, many of them the centerpiece of golf communities in which showy new homes lined underplayed fairways. Since 2006, 500 golf courses have closed, and the NGF predicts a net loss of about 150 courses per year for the foreseeable future. Despite the sport's ritzy image, the majority of closures will probably be public courses that charge less than $40 for a round.
The rebound in golf outings in 2012 is obviously welcome news for an industry that totals about $20 billion in greens fees every year and $5 billion more in clothing and equipment sales. And it lines up with other signs that Americans are becoming more upbeat as the economy slowly heals from a brutal recession. Consumer spending has exceeded pre-recession levels, for example. Confidence is inching back upward. The stock market may hit new highs later this year.
Golf had another thing going for it in 2012: mild weather. PGA of America, the pro golfers' association, reports that the number of "playable days" rose 6.5 percent last year, with a bigger increase in several northern states, stretching from the Dakotas to Maine. More play in those states accounted for most of the national increase.
Like many other parts of the economy, however, the golf industry must adjust to a new normal. Golf simply isn't as popular as it used to be, especially since it's time-consuming and costly in an era when many families are struggling to build wealth. Many baby boomers, meanwhile, are poorly prepared for retirement as they approach prime golfing age. In that regard, golf may be an ideal economic indicator, since it requires money to spend, spare time and the optimism required to believe that the next round will be better than the last one.
Rick Newman's latest book is Rebounders: How Winners Pivot From Setback to Success. Follow him on Twitter: @rickjnewman.