Consumer Spending

Not long ago, a trip to the dollar store meant going on a treasure hunt through cluttered aisles not knowing what you would find: a cranberry-scented candle, a scratchy towel, a box of look-alike Oreos. But in the last few years, dollar stores have been going through a makeover, adding refrigerators and freezers, stocking more food and cleaning up the presentation. As the recession hit, the dollar stores were ready with low-price groceries to attract a newly frugal middle class.

Fresh signs emerged Monday that the recession was letting up. Manufacturing's slide is slowing. Builders are boosting spending on construction projects -- including homes. And consumers aren't cutting back as much as some had feared. A trio of reports gave Wall Street a big lift on the same day that industrial icon General Motors Corp. filed for bankruptcy protection.

Now it's Dad's turn to feel celebration deprivation. Retailers expect Father's Day spending to decline this year because of the recession. But dinner and neckties will still be popular gifts, according to a National Retail Federation survey. The survey found that U.S. consumers are expected to spend an average of $90.89 on gifts for fathers this year, down almost 4% from $94.54 in 2008. Total spending is expected to reach $9.4 billion.

Somewhere between Debbie Reynolds and Jack Benny, the Laitala family of Duluth, Minn., stopped to marvel at the throngs of tourists shuffling among the sidewalk stars of Hollywood Boulevard. Joel Laitala, a mechanic, focused his camera on a star in the pavement while his wife, Lori, watched as costumed characters -- Superman, Capt. Jack Sparrow and Homer Simpson -- posed for photos with tourists for tips.

Mike Meyer and Ronnie Russell prefer to vacation far from their Newport Beach home, but a recent excursion found them plying the placid blue waters of Big Bear Lake aboard a faux pirate ship. The couple own a condo in this mountain community, and this is where they now spend a lot of their down time. "We usually go to Mexico or exotic places like that," Ronnie Russell said from her perch on the ship's deck. "But with the economy and everything, we aren't doing that as much."

Americans may have poured money back into stocks this year, but market watchers worry that they aren't spending enough on other things -- such as clothes, cars and computers. This week, the average U.S. consumer returns to the spotlight. The Commerce Department reports on May personal spending and incomes Friday, the same day that the University of Michigan reports on June consumer sentiment.

Shoppers stiffed Mom, Dad and the Easter Bunny but appear to be giving Uncle Sam extra love this Fourth of July. More Americans are planning celebrations, with the requisite spending, this year than last July 4, according to a National Retail Federation survey. The trade group found that almost 63% -- or 144 million people -- plan to host or attend a cookout, barbecue or picnic. That's 5 million more than in 2008.

The continuing decline in consumers' use of charge cards and other forms of credit reflects an underlying weakness in the U.S. economy that most of the government's recovery plans fail to attack head-on. And it suggests a fundamental shift in the way Americans save and spend that is likely to act as a drag on the economy for at least several years. Beset by rising unemployment, declining wages and persistent credit-tightening by banks, consumers are pulling back.

In your effort to save, you may have signed up for a membership at a warehouse store such as Costco or Sam's Club. True, such stores do have great bargains, but have you ever found yourself at the checkout line with one too many boxes of pasta or a book you didn't really need? You're not alone. Researchers have found that discounts often drive people to buy more.

Coupons and discounts will be the hottest styles for back-to-school shoppers this year. Summer is not even half over, but retailers throughout the Southland are gearing up for back-to-school season with new youth fashions, nifty office supplies and steep bargains. "All eyes are shifting to back-to-school -- it's the only catalyst where consumers have to go out and spend between now and the holiday shopping season," said Ken Perkins, president of research company Retail Metrics Inc.