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Job losses drag on retail prospects

Recession may have hit bottom, but consumers remain fearful of the future.

According to the Ohio Department of Job and Family Services unemployment rates are higher than they were this time last year, yet holiday spending is only predicted to dip slightly.

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By Ben Sutherly, Staff Writer Updated 11:28 PM Wednesday, November 25, 2009

DAYTON — A consumer-driven economy beset by sky-high unemployment, scant consumer confidence, high housing debt and higher costs for health care won’t make for many “ho-ho-ho’s” at local stores this holiday shopping season, experts said.

Stores on Friday, Nov. 27, will open their doors to bargain hunters on the heels of a fresh barrage of dismal economic data, including local unemployment rates that continue to inch upward. In Montgomery County, the unemployment rate in October was 11.4 percent, up from 7.8 percent a year earlier.

Though the severe recession seems to have hit bottom, consumers are generally glum about the prospects for job creation, said Dr. Leonard Kloft, director of the master of science in social and applied economics at Wright State University’s Raj Soin College of Business. Still others are underemployed or fearful about the future of their jobs.

“We’re facing an economy in which a large number of people don’t have jobs; they don’t have income,” said Kloft, noting the losses locally of General Motors, Delphi and NCR. “We’ve been hit hard by this recession.”

Montgomery County alone lost more than 60 percent of its manufacturing jobs between the first quarters of 2001 and 2009, said George Zeller, an independent economic researcher in Cleveland.

“These are just gigantic losses,” Zeller said.

In a report released this week based on U.S. Bureau of Labor Statistics data, Zeller said Montgomery County’s workers have lost 24 percent of their pay — about $3 billion — in the past eight years after adjusting for inflation.

“If people don’t have money, they’re not going to spend it,” Zeller said.

Bright spots during the upcoming shopping season could include consumer electronics thanks to price drops in the technology sector, Kloft said. He noted many consumers have tightened their belts for well over a year and may be ready to splurge a bit.

Besides, he said, “every once in a while, you need to brighten the face of a small child.”

Contact this reporter at (937) 225-7457 or bsutherly@DaytonDailyNews.com.

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