See where Californians stopped spending this summer – Orange County Register


The “Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”

Buzz: It wasn’t just homebuying that slowed this summer. Californians spent frugally in the third quarter.

Source: My trusty spreadsheet analyzed state sales tax collection by industry, looking particularly at consumer-centric activity in the third quarter. The California Department of Tax and Fee Administration’s tabulation of sales taxes payments is a rough indicator of consumer spending.

Debate: Homebuying binges and wild consumer spending is history.

Yes, the almost $19 billion in statewide sales tax collections for the three months ended in September equals 7%-a-year growth. However, that upswing is roughly one-third of the 20% spending pop during the summer of 2021 that was a speedy bounce back from coronavirus lockdowns of 2020.

Glass half-full

So, where is spending increasing?

Let’s start with gas stations, which collected $766 million in sales tax, up $120 million or 19% in a year vs. a rise of 55% in the previous 12 months. Rising pump prices fueled this spending growth, which certainly pinched buying power elsewhere in the economy.

And Californians still invested in their homes.

Merchants of building and garden goods collected $1.1 billion in taxes, up $17 million or 2% in a year vs. a rise of 8% in the previous 12 months. Firms doing household repairs or maintenance collected $235 million, up $27 million or 13% in a year vs. a rise of 25% the previous 12 months.

Online shopping built on its pandemic gains, taking in $1.3 billion in taxes, up $91 million or 8% in a year. That’s an improvement on a rise of 7% in the previous 12 months.

We still need to mingle so restaurants did well, collecting $2.2 billion – up $109 million or 5% in a year vs. a rise of 41% in the previous 12 months.

And the giant retailers — from department stores to warehouse merchants to discount chains – took in $1.3 billion, up $16 million or 1% in a year vs. a rise of 16% the previous 12 months. The low-cost players in this niche are faring well. Others suffer.

Glass half-empty

This is not simply about shrinking rates of sales growth. Consider what niches had declining tax collections as consumers switched spending habits while digesting inflation and various forms of economic unease.

Drug and beauty stores: $351 million collected, down 5% in a year vs. a rise of 10% in the previous 12 months. Diminished coronavirus fears lowered spending for health and cleansing products.

Furniture stores: $334 million – off 4% in a year vs. a rise of 9% in the previous 12 months. No need to redo one’s home as students go back to classrooms and workers go back to the office.

Food stores: $681 million – down 4% in a year vs. a rise of 4% in the previous 12 months. Inflation makes shoppers look for bargains and this niche lacks many of them.



Read original article here

Denial of responsibility! Vigour Times is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment
Enable Notifications OK No thanks