Signs show consumers are starting to spend again

There are new signs consumers are starting to spend again, if only cautiously.

Locally, both Nassau and Suffolk said Thursday they've seen a boost in sales tax revenue collected so far this year - an important indicator of retail sales. Nassau's sales tax revenue from Jan. 1 through March 31 increased by 11.8 percent compared to the same period last year. Suffolk's sales tax receipts through March and part of April went up 5.76 percent.

But just how much those consumers are willing to open their wallets ranges widely, with no consensus on whether an economic recovery has begun to take hold.

"If I start seeing the unemployment rate starting to drop, that would indicate to me that things are starting to improve," said Paul Stellino, 33, a medical device salesman from North Bellmore. He was laid off in January but was hired into his current position last month.

And then there's Jim Dreeben, owner of the Riverhead kayak specialty shop, the Peconic Paddler. Lately, he's become more inclined to relax his budgeting ways and worry less about eating out, he said, because he sold three times as many boats in April than he did a year ago.

As consumers feel out the economy, retail sales have reflected gains in consumer confidence, pent-up demand and a continuing wariness expressed by consumers like Stellino. In February, retailers reaped unexpected sales gains and continued seeing increases nationally in March, with sales rising 7.6 percent over last year.

However, retailers' April same-store sales reports - among the first indicators of last month's performance - offered a more mixed picture Thursday. While several national chains experienced declines, luxury companies like Nordstrom Inc. and Saks Inc. saw sale-store sales rise by 7.5 percent, 13.7 percent and 3.2 percent respectively.

"It's two steps forward, one step back," said Marshal Cohen, chief industry analyst for The NPD Group, a Port Washington market research firm. "You're going to make progress. It's just not as fast as everyone would like."

Howard Davidowitz, chairman of the Manhattan-based retail consulting and investment banking firm Howard Davidowitz & Associates Inc., was more pessimistic.

"I do believe that the overall, overarching trend is going to be negative because of the condition of the consumer compared to last year," he said. "Consumer bankruptcies are up. Food stamps are up. If you look at unemployment, it's up over last year at this month."

Keith F. Brady, a West Islip financial planner, believes that the economy is about a year away from truly growing. People are generally not investing and are being cautious. "They are still holding on to their money, [are] very concerned about interest rates and the day-to-day economy, and they're keeping their money in the bank," Brady said, referring to his clients.

In addition, the Dow's roller-coaster ride Thursday, news of furloughs for state workers, possible cuts of thousands of New York City teachers, and Greece's debt problems and civil unrest also will likely affect consumer spending in the immediate future, said Joel R. Evans, a professor at Hofstra University's Zarb School of Business. But he urges taking the longer view.

"We should not panic and assume that things are going to keep returning to normal through the rest of the year," he said. "Hopefully this is going to be for a week or two and things are going to bounce back again."