Economist: No gangbusters' holiday this year
Survey: Region's consumers more upbeat about economy
The "shaky" economic recovery may have an effect on this year's holiday sales, economists say.
Several factors that were part of the recession, including fluctuating house prices and the dramatic increase in unemployment, add to the stress felt by consumers, said Robert A. Dye, a senior economist with PNC Financial Services Group in Pittsburgh, the parent of PNC Bank. The bank is one of the largest in deposits and branches in Maryland.
While there has been "some recovery" with consumer confidence, the recovery is not resurgent, Dye said.
"It won't be a big disappointment, but it won't be gangbusters, either," Dye said, adding that retailers will "probably break even" with their sales.
Consumers in the Washington region, which includes suburban Maryland, are more optimistic about the future of the local economy than they were last spring, according to a poll released Wednesday by the Greater Washington Board of Trade. General confidence in the region's economy increased 4 points since April and 11 points since last December, the survey found.
That is welcome news, said Jim Dinegar, president and CEO of the Greater Washington Board of Trade.
"Consumers are clearly troubled by the job market, but sentiments about current conditions of the regional economy are considerably more positive than they were a year ago," Dinegar said in a statement. "The data also shows that a majority of consumers expect the economy to improve during the next six months."
However, respondents in suburban Maryland were less optimistic about the local economy than people in Washington. Confidence in the local economy among Maryland residents only increased by 1 point since April and 9 since December.
District residents saw their confidence rising by 8 points since April and 16 since December. Factors for the higher increase among Washington residents include a lingering "Obama effect" and the growth of the federal government, the report said.
And despite the increase in consumer confidence from April, a slightly lower percentage of respondents in the region expected to make a major purchase in the next six months than they did last spring. That likely reflected "continued concern over the job market," the trade group reported.
More self-employed workers expected their income to increase in the next six months than they did in April.
The poll of 1,202 adults in the region was taken Nov. 1-5 by Clarus Research Group of Washington. The sample included people in eight Maryland counties: Montgomery, Prince George's, Frederick, Howard, Calvert, Charles, St. Mary's and Anne Arundel.
Since the country just emerged from a "very broad" recession, Dye said it was still too early to say consumers are ready to bounce back.
"It is a cautious environment," he said. "The private sector must come back and re-engage."
Consumer spending also has to re-engage in a meaningful way, Dye said. That will not happen until there is a substantial increase in housing prices, as well as a significant decrease in unemployment, he said.
The latest national figures for unemployment saw a jump to 10.2 percent in October from 9.8 percent in September and 6.6 percent a year ago. Maryland's unemployment rate for September was 7.2 percent, up from 4.6 percent a year earlier. October figures for Maryland and other states are due out today.
In a jolt of positive momentum, the number of existing housing units sold in October in Maryland jumped by 39.5 percent from a year earlier, according to the Maryland Association of Realtors. However, the median price of the homes sold last month declined by 8.7 percent to $250,210.