Rebuilding consumer confidence is key step

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Bryce Jacobson, publisher of the Craig Daily Press

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As the local and national economy continues its slow recovery, I am more convinced than ever that consumer confidence is one of, if not the only, indicator that can predict where things are going.

One national example indicates consumer confidence is growing.

According to many experts, Mother’s Day spending both locally and online were up between 4.2 and 6.5 percent.

The final results of what actually happened have yet to be tabulated, but I am hopeful they were correct.

To take a look at local consumer confidence, there are several statistics I can put some faith in, one being sales tax collected by the city of Craig and Moffat County. So far that data is not fairing too well this year in comparison to 2009, let alone 2008 or 2007.

Due to the delay in reporting these numbers and my desire to see the glass half full, I am going to rely on another piece of consumer confidence, albeit one that’s unofficial, to consider.

That is the number of people I see shopping in Craig and Moffat County as an indicator that things are pointing in the right direction.

I attempted to install a basketball hoop on my garage Saturday, and like any manual project I embark upon, multiple trips to hardware stores were required.

Each time I went, it seemed that the stores were really busy.

I don’t know for sure, but I can tell you it seemed like people were out and about in Craig spending money this weekend.

In closing, I am not an economist and therefore this is just my opinion.

I really don’t know how to impact consumer confidence and encourage people to shop locally, other than to ask you, the readers, to spend some money.

Give the economy the boost it sorely needs by putting more of your hard-earned dollars to work.

It’s important that we once again have faith in the future.

Comments

Scott Ford 3 years, 11 months ago

Hi Bryce - The Yampa Valley Partners released its first quarterly economic forecast in March 2010 forecasting six areas for periods forward from 3 months to 18 months. Retail sales were forecasted for the next 90 days (April, May and June). So far so good. The forecast for Moffat County was built 10 years of monthly historical data. The good news is that Moffat County data is highly correlated with national sales data. The strength of this correlation is +.8 That's really strong. This allows us local economic types to use national forecast to reasonable predict Moffat County Gross Retail Sales. Simply put the residents of Moffat County spend in very similar ways as their 307 million fellow Americans.
Gross Retail Sales are likely down seven to 8% for the same period last year. Although not great news, the rate of decline is dramatically slowing. The consumer nationally including those in Moffat County jumped off a collectively cliff beginning in March 2009. Consumer spending fell from October 2008 to March 2009 fell by 40%. Considering that consumer-spending accounts for about 2/3 of all economic activity in our country - we came real close to a beginning deflationary cycle - which is far worse than an inflationary cycle.
The challenge with the Retail Trade sector is that there is only so much money (personal income) that can be made from it. Using sales tax to measure this economic sectors' relative health is a very blunt tool. Businesses could be operating at a prolong loss - and still pay sales tax. This is why I think personal income is a far more effective tool for measuring the health of this and any other an economic sector.

Here is a question - Over the past 8 years (2001- 2008) which of the following is true. Retail Trade - Wages/Salaries and Proprietor's profits as a percentage of total private earnings from all other industry sectors from the Retail Trade Sector after adjusting for inflation in Moffat County have: A. Have stayed relatively unchanged B. Have declined by 5% C. Have increased by 2% What do you think? Scott

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