Double-Digit Jobless Rate Makes California’s Christmas Look Blue, Not Green With AM-Economy,
Double-Digit Jobless Rate Makes California’s Christmas Look Blue, Not Green With AM-Economy, Bjt
LOS ANGELES (AP) _ Retailers may be celebrating the recession’s end in many parts of the country but in California, where November unemployment hit 10.1 percent, storekeepers fear shoppers will hand them a lump of Christmas coal.
Even positive signs are greeted skeptically this holiday season. Witness Carter Hawley Hale Stores, the West’s biggest retailer, which recently emerged from bankruptcy into California’s longest recession since the 1930s.
Its sales rose 6.4 percent in November, but ″We’re not ready to say that everything’s hunky dory yet,″ spokesman William Dombrowski said.
″That’s one month’s number. ... We still think the California economy is very tough.″
How tough was reflected in a recent letter from Fred Sands, a Los Angeles real estate broker, to thousands of high-end clients.
Sands urged them to cut asking prices on their homes drastically or forget about a sale for three years. Many houses are 25 percent to 30 percent overpriced today, he said in a telephone interview.
″The whole mentality has changed, even among people who can afford anything,″ he said. ″All anyone wants is a bargain. Go to Beverly Hills - 40 percent of the stores on Rodeo Drive have ‘sale’ signs in the windows.″
It’s so tough that the Los Angeles Chamber of Commerce was forced to lay off eight people, including its chief economist.
An Arthur Andersen & Co. survey found 92 percent of Los Angeles shoppers have no plans to increase Christmas spending from last year’s already scanty levels. Numbers were similar in Orange and San Diego counties.
Greater Los Angeles, long reliant on defense-related industries, has been hard-hit by Pentagon spending cuts, and has the nation’s highest office vacancies and some of its sharpest declines in housing prices.
But the economy remains sluggish throughout most of the state. A November survey of the Sacramento-Stockton area by Deloitte & Touche found 92 percent of those responding expected consumer spending during Christmas holiday season to be even with last year’s levels or lower.
″Clearly, this is reflective of the notion that an upturn in the economy in Sacramento is lagging behind the rest of the nation,″ said Mark Rodebaugh, managing partner of the accounting firm’s Sacramento office.
Shoppers at the upscale San Francisco Shopping Centre said they were watching their wallets.
″I don’t want to buy expensive things. Just the cheapest ones,″ said Ed Laureta, 32. He said he needs to buy 12 gifts but has only $200 to spend because his work hours have been reduced from full time to part time.
However, James Cassell, 25, said he was paying more for gifts, like a $90 suit for his 4-year-old nephew, despite the recession.
More typical was the reaction of Terry Schomburg, 42, of Huntington Beach. Schomburg, an accountant strolling with his family through Bullock’s department store at the South Coast Plaza in Costa Mesa. He said they will hold back on spending because of fears of layoffs.
Jacqueline Barrett, a 23-year-old student and part-time waitress, was shopping for a book at Fashion Fair, Fresno’s largest mall, and looking through magazines that offer do-it-yourself gift ideas. She planned to make decorations for her father’s house and a jewelry box for her sister.
Jeff Reynolds, research chief for the state Board of Equalization, which tracks about $2 billion a month in sales taxes from 900,000 businesses, saw little reason for cheer.
″Just looking at the cash receipts thus far this fiscal year, it doesn’t look like we are entering any kind of recovery period at all,″ he said.