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Tale of three workers: Optimism and worry as signs of recovery grow

Mark Gran, a sheet-metal fabricator in Kansas City, Kan.; Neri Cruz, a postal worker in San Marino; and David Viggiano, a software developer in Atlanta, plan to spend this year on things they've put off — but cautiously.

January 20, 2011|By Don Lee, Los Angeles Times

Reporting from Washington — After three years of brutal recession and tepid recovery, the outlook for the U.S. economy this year may boil down to a tale of three workers and their families — their hopes, fears and, most of all, their decisions on spending the money they earn.

For now, they seem to be getting their spending mojo back. But they are moving forward with a new caution, a hard-earned sense that events could quickly turn for the worse and they'd better be prepared.

In an economy that relies on consumer spending for 70% of the nation's gross domestic product, nothing really matters as much as what the 90% of U.S. workers with jobs decide to do with their money — spend it, squirrel it away, use it to pay down debt.

Many analysts expect consumer spending to play a big role in driving economic recovery this year, especially after the best holiday retail shopping season since 2006.

"They're feeling more comfortable and not so gun-shy about going out and shopping," said Shawn DuBravac, chief economist at the Consumer Electronics Assn.

A survey by his group and others showed more consumers at all income levels hitting the stores, indicating more confidence in a recovery.

But it's not quite that simple for Mark Gran, 52, a sheet-metal fabricator in Kansas City, Kan., or 44-year-old computer software developer David Viggiano in suburban Atlanta or even for 28-year old Neri Cruz, whose job as a postal worker in San Marino would seem to provide security and solid income.

An earlier version of this article said postal employee Neri Cruz works in Pasadena. He works in San Marino.

For all three and their families — as with millions of other Americans — their greater optimism coexists with worries over rising costs for energy and other essentials, prolonged high unemployment and a shaky housing market.

They share something else as well: the scars of a painful recession that is never far from their memories or their pocketbooks.

Paying his debts

Mark Gran spent one of his happier holiday seasons with his 17-year-old son and ex-wife in Jupiter, Fla. They hit the beaches, exchanged gifts and visited with relatives.

It was a striking contrast to a year earlier, when Gran was stuck in the cold winter of Connecticut, jobless and broke.

"There was no money. No vacation," he said tersely.

For three years, Gran got by on unemployment checks and doing whatever odd jobs he could find, such as yard work. But last September, he was hired by A&E Custom Manufacturing, a Kansas City metal fabricator.

Gran now earns more than $40,000 doing computer-aided design. He's been staying with a relative but now believes he can afford his own place. He plans to buy new furniture and other things for his apartment.

Still, he'll hardly be spending freely. For one thing, Gran has debts to pay off. He won't say how much but instead lets out an uneasy laugh. "Yeah, it's going to take a couple years," he said.

On the whole, American consumers have sharply reduced their debts since late 2008, thanks in part to fears of layoffs and lender cutbacks in issuing credit. The nation's personal saving rate, near zero during periods of the housing boom, has been above 5% for the last two years.

Analysts think that could keep rising in the long run. And the higher the saving rate, the less money is available for spending.

Gran intends to spend more, but only to a point. His goal is to sock away a third of his paycheck, at least until he builds up a three- to six-month cushion for living expenses. He wants to be hopeful about the future, but the last decade has left him wary.

The Detroit native started out in the metal fabrication trade as a 21-year-old in San Diego County, working on aircraft wing sections for a contractor. He would stay in Southern California for two decades.

In 1998, he moved to the East Coast and was bounced out of work about every three years. When manufacturers stopped hiring during the recession, he took a part-time job as an order filler for Staples, making $10 to $14 an hour, but was laid off from that position as well.

"I'm trying to fit in and help out," he said of his current company. But the economy worries him. "Gosh, oh, boy, I wish it was doing better," he said. "There's only so much you can do. It's out of my control."

Relaxing — a little

Neri Cruz called 2010 "the year of austerity" for him and his wife, Cindy.

With his pay frozen as a supervisor at a San Marino post office and his wife enrolled in nursing school, the couple's only major purchase was a modest Santa Clarita home they bought at a foreclosure sale. They skipped taking a summer vacation. And at Christmas, they dropped friends and distant relatives from the gift list.

But next month, Cruz expects to see a pay raise of 4% to 5%. And he's counting on extra dollars from the Social Security payroll tax cut for all workers this year.

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