A key economic indicator could be signaling a recovery for local retailers and consumers.
A recently released U.S. Consumer Price Index summary from the Bureau of Labor Statistics shows overall prices have been fairly stable. The rate of inflation also slowed from August to September, according to the index.
This likely indicates that the cost of living is falling for people who are residents in Chapel Hill, said Ralph Byrns, a UNC economics professor, which means people can buy more groceries and other goods with the money they earn.
“A stable CPI is generally going to mean that prices are not going up, so people can probably make their spending plans with more certainty,” he said.
This could point to an increase in consumer spending, a trend that Chapel Hill-Carrboro Chamber of Commerce business members said they are seeing.
“They’re saying that ever since about July 2009, business has been starting to slowly pick up,” said Adam Klein, vice president of the chamber.
“I think they’re seeing consumers and clients spending a little bit more and also new customers coming to their stores,” he said.
Katie Underhill, the Chapel Hill Uniquities manager, said merchandise has been moving.
“We are selling a lot of our new stuff,” Underhill said. “I think people are interested in shopping again.”
Heather Frazier, the Johnny T-Shirt retail division manager, said vendors have not been raising prices, and consequently, the store has not had to either.
“Over time as inflation goes up, as our vendors raise their prices, we naturally have to raise ours,” Frazier said.
“I do know most of our items have not gone up in price, especially through the recession.”
She said the increase in customer traffic is mostly due to school being in session and football season.
“Carolina fans are going to spend their money on Carolina merchandise,” she said.
“They’ll cut from other places before they cut from buying their Carolina stuff.”
But Byrns said a stable index may not translate to consumers spending more. He cited rising gas prices, which are unusual at a time when demand for oil is typically low.
“As you start approaching winter, people tend to stay home,” Byrns said. “So the increase in the price of oil might actually mean that people may start worrying about inflation.”
Consumer spending
What is the consumer price index?
The index, produced monthly, reports changes in the prices paid by urban consumers for a representative basket of goods and services.
What does the index mean?
The index is the basis for computing cost-of-living raises in many union contracts.
Past price index increases:
Aug. 2009: 0.4 percent rise
Sept. 2009: 0.2 percent rise
The index has decreased 1.3 percent over the last 12 months, not seasonally adjusted.
Contact the City Editor at citydesk@unc.edu.
