'Frugal America' a catch 22

TYLER, TX (KLTV) - By Layron Livingston - bio | email
Posted by Ellen Krafve - bio | email | Twitter

TYLER, TX (KLTV) - Until more jobs start opening up, many Americans are keeping their wallets closed. Experts say consumer spending accounts for nearly 3/4 of all economic activity. But in a poor economy, spending is the last thing on your minds.

The so-called consumer "catch 22" is leaving some East Texans looking to cash in.

"[We] try to make a little bit of money and help people save some money [at this yard sale]," said Hunter Hartley.

As it does with yard sales the same goes with the economy. It is all about buyers and sellers. Hartley is a little bit of both.

"We did so well last year, we said, 'Let's see what else we really don't need,'" said Hartley.

It is a draw for frugal East Texans.

"You gotta do whatever you can to save an extra dollar, here or there," said Hartley.

"They've got to have the confidence," said Max Anderson, owner of Whitehouse Floors and More.

A little more than a year ago, Anderson created his own Whitehouse Stimulus Package, refunding customers' taxes to be used for purchases at other local businesses. Anderson says it was successful, last year, but not so much, this year.

"We had a lot of shoppers," said Anderson. "They just weren't pulling the trigger."

"They're fearful because there are so many unknowns...and new things that are taking place that they're holding back on their spending."

Sales tax is a major source of revenue for the City of Tyler, but it is down, close to 9% from last year.

"What we're actually seeing is a decrease in the oil and gas sector, construction, and to some extent, utilities," said Keidric Trimble, the City of Tyler Budget Director.

Local experts say it is not all doom and gloom. Savings rates are up and that could be a good thing.

"There's been some research that shows higher savings rates, now, predict more consumer spending later," said Harold Doty, Ph.D., UT Tyler Dean of Business and Technology.

Doty says recovery is sluggish, but if we can, we should participate.

"People who are working and have good jobs right now shouldn't be as concerned about saving everything," said Doty. "It's time for us not to make frivolous purchases but begin making some of the important purchases we've been delaying."

Another interesting side-note. Many cities and districts have increased local tax rates to make up for their losses. Experts say more economic activity could bring those tax rates back down to previous levels.

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