`I Don't Have Enough Money To Walk Through The Local Mall'Chuck Hawkins
President Bush may claim that "the economy is moving in the right direction," but the message doesn't seem to be sinking in. Listen to Linda Pierce, 43, who says business has been falling steadily since February at her Dallas shoeshine stand: "I see too many people hurting and too many industries laying off. The government says: `Buy, buy, buy,' but consumers are running scared." Or to Pat Austin, 37, of suburban Atlanta, whose husband just landed a job managing a sporting-goods store after an eight-month search: "We feel more hopeful about our future, but I drive right past the mall and shop at Kmart or Wal-Mart instead."
Pierce and Austin aren't alone. A common thread runs through interviews with dozens of Americans conducted by BUSINESS WEEK correspondents in recent days: The fear and uncertainty are palpable. And although government statistics suggest that a slow recovery from a relatively mild recession is under way, most consumers aren't so sure.
EMPTY POCKETS. "I'm really afraid to buy anything," says Kansas City (Mo.) mail carrier Kip Morris, 40. The U. S. Postal Service's recently announced plan to eliminate nearly 47,000 jobs by 1995 has Morris fretting. For Nashville gas station owner Winston Tucker, the worry is about slow tire sales: "People who usually come in and buy a set, they're now saying if they can get a few more miles or a few more weeks, they'll let it go." Tucker blames credit-card rates that remain as high as 21%, but adds: "The consumer doesn't have money in his pocket to spend."
The caution that Tucker is seeing at his Phillips 66 station is evident all across the nation. The unemployment rate peaked at a fairly low 7.0% in June, but nearly everyone interviewed had a story to tell about a family member, neighbor, or friend who'd lost a job. Set against those tales of woe, dips of 0.1% in the jobless rate don't do much to reassure worried working people. That may be why the Conference Board's monthly index of consumer confidence has slowly declined--from 81.1 in March to 72.7 in September.
Most of those interviewed held no high opinion of Washington. Arthur Mayo Jr., a 24-year-old electrician working in Boston, faults Bush for threatening to veto a bill extending unemployment benefits. The issue hits close to home: 1,000 of the 4,500 members of Mayo's union local are out of work. "Bush is definitely not for the working people," says Mayo. "Both Reagan and Bush--everything's for the rich."
Diana Fandel, 34, of Maynard, Mass., a marketing manager for a medical-products manufacturer, believes Bush is doing a "shoddy job" managing the economy. "We need a national agenda," she says. "We need strong leaders who would put forth a national plan. It might be painful, but we have to do it." Arthur Martinez, a customer-service representative at NCNB Texas National Bank in Dallas, doesn't rail at politicians, but he doesn't expect much from them, either. Asked what he thinks Bush and Congress should do, he replies: "I'm not sure they can do anything."
If it's any consolation, these dreary economic times are a bargain-hunter's paradise. John Carapiet, 44, a water-department inspector in San Francisco who also restores and sells Ferraris, just spent $200,000 remodeling his house. "If I had done it two years ago, it would have cost 50% more," he says. Construction crews hungry for work bid aggressively, and Carapiet crows that he paid $3,700 for a Sub-Zero refrigerator that carries a list price of $6,000.
Carapiet isn't the only one making large purchases. Union electrician Richard Larsen, 28, works alongside Mayo in Boston and shares his opinion of President Bush. Still, it's Bush who keeps telling Federal Reserve Chairman Alan Greenspan and bank regulators that low interest rates are the best cure for the economy, and Larsen is inclined to agree. He says he and his wife have just bought a house, thanks to low mortgage rates and depressed housing prices. "That's how I've benefited from the recession," he says.
NO RAISE. But for every story like Larsen's, there are several from the other side of the fence. Paul Mantzke, a line worker at Caterpillar Inc.'s heavy-equipment plant in Aurora, Ill., can't agree with the Federal Reserve, which says that growth in the manufacturing sector makes the Midwest the region with the liveliest economic revival. "I don't see a whole lot of pickup in orders," he says. And he wishes Washington would act. "The President really needs to look at things differently," says Mantzke. "There's still something wrong."
Or consider Lennell Allen, a 45-year-old single mother, who makes around $45,000 a year running the electron-microscopy lab at the medical center of the University of California at San Francisco. Like all her fellow workers, she will get no merit or cost-of-living raise this year. "It means my salary is not going up, but my utility bill probably will go up, and food goes up, and gas goes up," she says.
No wonder she's not inclined to heed the economists' call to step up her spending for the sake of the commonweal. "I'm not a particularly good participant in the present economy. I don't feel I have enough money to walk through the local mall, and generally I don't," says Allen. "There's no way the economy is improving."
President Bush surely would debate that point. He probably would cite the 5.3% annual growth rate in disposable personal income over the past four months. That's usually a sign that a consumer-led recovery is in the offing. This time around, though, few want to be the first to open up their wallets.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Stocks Tumble, Bonds Gain as Trade Tensions Rise: Markets Wrap
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Uber Autonomous Accident Video Shows Car Just Before Collision