Consumer spending locally and nationally on the upswing

meperez@sunherald.comJuly 14, 2014 

Gregory Bradley, who teaches in the Department of Management and International Business at University of Southern Mississippi in Long Beach, said he thinks the local economy is improving but this economic recovery looks different than past recoveries.

"Perception is what drives spending," Bradley said, and he is seeing some encouraging signs, like the crowds on South Mississippi beaches during the July 4th weekend.

"It just feels like finally we're seeing some recovery," he said.

New reports from the Bureau of Labor Statistics show Americans dramatically cut spending on travel and dining out during the recession and delayed purchasing new vehicles and buying homes. The reports also show most, but not all, spending gradually is returning to pre-recession levels.

"Beyond the Numbers," compares the economic boom of 2005-2006, the recession of 2009-2010 and recovery years 2011-2012.

"There are certain expectations that many economists have about consumer spending in a recession, compared with a boom or recovery," the BLS report said. The reports show that people ate at home more often and when they went out for a meal, they chose less expensive restaurants. That trend has continued into the recovery, according to the report.

Consumers also kept their vehicles longer to save money, from an average of 10.1 years in 2007 to 11.3 years in 2012, according to BLS report "Americans' Aging Autos." The purchase of new vehicles is substantially higher than during the recession, although still below boom levels.

"Consumers are aware of what their general net worth is," Bradley said. "They're not as comfortable now, certainly, as they were before the recession."

Housing prices haven't recovered, he said, and people saw "really modest growth" in personal income during the recession.

Home equity loans let consumers temporarily increase their quality of life during the boom, yet most people in South Mississippi lost equity in their homes during the recession.

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