By David Young
The Coloradoan
8/20/11

With recent economic turmoil and volatility on Wall Street, there has been much consternation by experts and analysts as to what it means.

Words such as inflation, debt ceiling, recession, double dip and consumer confidence have all filtered into everyday lexicon.

However, as the global economy shifts minute by minute, Fort Collins residents appear upbeat about the future.

With better-than-average economic indicators including employment, foreclosure filings and home values, Fort Collins and Northern Colorado have fared better than much of the state and country. As a result, local residents are a little less frantic about the state of the economy.
Consumer confidence

Sisters Gwen and Angie Dillman spent Tuesday afternoon shopping in Old Town.

They saw lots of things they'd like to have but decided to save their money for another day.

After making their way through a number of shops, the sisters came to the same conclusion: Recession. What recession.

"I'm amazed there is a recession," Angie Dillman said. "People are out shopping."

A walk through downtown Tuesday showed stores filled with shoppers, and shoppers with purchases.

Zachary Rushton, 24, of Loveland sat outside a coffee shop on College Avenue on Tuesday sipping his coffee. He said the roller-coaster stock market has not affected his daily spending habits or faith in the economy.

"I'm pretty confident that things will work out one way or another," he said.

After two years of unemployment, Fort Collins resident DJ Bennet just got a job with hairfeathers.com and said he is spending more money because he is making more money.

With a feather in his hair, Bennet said his confidence in the economy is high right now.

"A couple years ago, no businesses were opening. It seemed like the people that had money weren't spending money to make more money, and now they are. Now, they are starting to open businesses giving more chances for employment for the rest of us unemployed here in Fort Collins. I think that's why my confidence level is so high," Bennet said.

Stephan Weiler, professor of economics research and associate dean at Colorado State University, said compared to recent national confidence levels, Fort Collins is doing well. He noted the cities with universities such as CSU typically fare better than those without during such tough economic times.

"Relative to the rest of the country, I think we are more thankful for living here for a variety of reasons," Weiler said. "The economy is one reason. It's not great, but we're thankful it's not much more affected."

Weiler said there are several main factors that play into consumers' confidence locally. One of the main factors is home values, and while many Northern Colorado home owners have taken a hit recently or faced foreclosures, compared to areas like Los Angeles, Las Vegas and Phoenix, Fort Collins did not experience the same degree of inflation nor the same crash as a result.

The other factor that contributes to consumer confidence is unemployment.

"The job situation is better than the nation as a whole," Weiler said. "Overall the unemployment rate is lower and job growth a bit better than the country as a whole."

And while locally consumers are expected to be more careful with their money and reel in spending some, Weiler said that the concept of saving more and spending less is a welcomed concept after recent economic foils.
Business confidence

Local businesses report that while the economy is clearly hurting, local business has stayed strong and even increased in some instances.

Wendy Poppen, manager of Ten Thousands Villages, said while consumer confidence is not great it's not terrible in light of recent national news.

The Old Town nonprofit organization that sells fair trade products tends to benefit from such downtimes, Poppen said because customers are able to stretch their dollars further.

"I have not seen it (consumer confidence) falter," Poppen said. "I feel like people are thinking more when they spend, we get more people walking through and looking more and not buying."

Old Town Spice Shop owner Sean Godbey said throughout the summer he has seen an increase in business that is tapering off a bit in light of school starting again. He attributed that increase to people staying home and cooking more and eating out less.

Joe Dowdy, manager of Dollar Discount, 514 S. College Ave., reported that sales have remained flat for the store that caters to bargain shoppers.

He said while more people may frequent the shop during down times looking to save money, the shop is facing increasing competition from stores that accept food stamps.

"I think it has given us more competition," he said. "We are now competing with King Soopers."

Nancy Jianakoplos is a professor in the Department of Economics at CSU who has worked as a research analyst and economist in the Research Department of the Federal Reserve Bank of St. Louis before arriving at CSU in 1990. She said while some people may be concerned about the value of their stock portfolios, typically, confidence is based on employment and job security.

With that in mind, she predicted their may be an indirect impact on consumer confidence if the current economy causes businesses to close or retrench and pull back on hiring.

Dawn Putney, co-owner of Toolbox Creative, has seen a direct impact on her business as a result of the stock market's turbulence.

Putney, whose graphic design and marketing company is on pace to grow 25 percent this year, said she was inking the deal on a project with a Northern Colorado client when the deal fell through.

On Aug. 11, Putney received an email from the client who was self-funding the project who said they were going to delay the project based on the stock market dive that changed their outlook.

As a result, Putney has reexamined her own business and is looking to put plans to hire new employees on hold, despite the recent growth.

"Even though I should be confident we're still kind of holding our breath," She said. "We want to wait and see what is really going to happen."
National confidence

Nationally and globally, the economic picture and confidence level is less secure than here in Fort Collins.

he Conference Board Consumer Confidence Index, which had declined in June, improved slightly in July. The Index is 59.5, up from 57.6 in June, according to The Conference Board.

"Consumer confidence posted a modest gain in July, the result of an improvement in consumers' short-term outlook. Consumers' appraisal of current business and employment conditions, however, was less favorable as concerns about the labor market continue to weigh on consumers' attitudes.

Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated," said Lynn Franco, director of The Conference Board Consumer Research Center, in a prepared statement.

Overall, consumers' assessment of current conditions worsened in July, according to the report. Those stating business conditions are "good" decreased to 13.4 percent from 13.7 percent, while those claiming business conditions are "bad" increased to 39 percent from 38.4 percent. Consumers' appraisal of the job market also was less favorable. Those claiming jobs are "hard to get" increased to 44.1 percent from 43.2 percent, while those stating jobs are "plentiful" remained unchanged at 5.1 percent.

Consumers' outlook for the labor market over the next six months was mixed. Those anticipating more jobs in the months ahead increased to 16.7 percent from 13.8 percent. However, those expecting fewer jobs also increased to 21.8 percent from 20.7 percent. The proportion of consumers anticipating an increase in their incomes rose to 15.7 percent from 14.1 percent.

The country's misery index, the combined unemployment rate and inflation rate, hit 12.76 in June. That is up from 12.67 in May and 10.55 a year ago.

http://www.coloradoan.com/article/20110821/BUSINESS/108210338