Do you feel like the economy is headed in the right direction? A local economics professor says there are some good signs out there, like the stock market at record highs, auto sales doing well, and improvements in the housing market. But it's not time to celebrate yet. Richard Measell at Saint Mary's College said people are still being cautious when it comes to spending. And that's because of several factors.
First one, the Payroll tax cut has been gone for a couple months now. Meaning people have seen a few paychecks with a 2 percent increase in their taxes. Brittany Moffat said, "Yeah, you can definitely see that. The higher my check, the more they take."
And with less money people are cutting back. "I just go to work and take the kids to school. We don't really do anything right now. One vacation a year that's about it," said Moffat. "We bargain shop, clearance racks when the kids need anything. We don't eat out anymore we just kinda stay close to home," said Jennifer Bloss.
But the loss of the payroll tax cut isn't the only thing changing spending habits. There's even more noticeable changes such as high food prices and high gas prices. "We just can't afford gas, gas prices are so high," said Bloss.
Measell said those high food and gas prices, "That sort of puts a chill on the consumer and they're not gonna be spending as much." And that's not good for the economy. ""It looks like we're having slow economic expansion at this time," said Measell.
Local consumers aren't optimistic it's going to get better anytime soon. "I hope so but I only think it's gonna get worse," said Moffat.
But Professor Measell said it may get better as the year goes on and people adjust to having less money. He said the real test will come later this year. "As the weather gets better and they have more options what will they do? Will they cut back or decide to increase? Here's what we should watch in the days ahead, will people go out and travel? And how will their spending compare to summer's past?
