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Stefan Tohatan's Blog

By Stefan Tohatan | Agent in Scottsdale Desert Es...

Les Miserables... can you hear the people sing?

Three-fourths of Arizona family heads said they have cut back on their spending since the recession began, according to the latest Rocky Mountain poll.

And half of households said they had to cut back "a lot," said the survey conducted by the Behavior Research Center in Phoenix. That effect was felt more in rural areas, where 57 percent of families had to cut back a lot.

The survey indicates that households in all income levels apparently have cut spending.

Not surprisingly, the lower the income, the more families had to cut back. Of those making $44,999 or less, about two-thirds said they had to cut back a lot.

But even 39 percent of those earning $100,000 or more also said they had to cut back a lot.

The poll results are consistent with retail revenues, which remain about 20 percent below pre-recession levels, said Arizona State University economist Dennis Hoffman.

But the good news for retailers is that the survey also found that 3 in 10 said they have reached the point where they can't put off major purchases as autos, kitchen appliances or home repairs any longer, suggesting they may be ready to spend.

"Clearly, consumers have cut back. At the same time, there is positive movement in the pace of transactions, partially fueled by the fact that people can only go so long before purchasing consumer durables," Hoffman said.

"So lured by low interest rates and enticed by the fact that their existing cars, roofs, appliances, etc. are wearing out -- Arizona consumers are shopping again," he added. "And the pace of consumer spending will essentially dictate the pace of the recovery."

About half of younger adults and families with incomes under $45,000 said they believe they have put off major purchases long enough. Living in rent tends to cost more every month and buying a house is very much in their plans.

Sales-tax figures released by the Arizona Department of Revenue have shown that retail sales continue to grow. Sales in July rose 8.6 percent over July 2010. That followed a 7.5 percent increase in June 2011 compared with June 2010. Sales of motor vehicles jumped 18 percent in July compared with a year earlier.

The poll was based on 700 interviews with adult heads of households conducted between Oct. 13 and 24. The margin of error is plus or minus 3.8 percent.

Always available,

Stephen F. Tohatan PhD

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