The U.S. economy is currently in the midst of its most challenging period since the early 1990s. The economy lost 760,000 jobs during the first nine months of 2008, and national gross domestic product likely contracted during the second half of the year. Add in the turmoil in the global financial markets, and it is likely that an economic recovery will not gain a firm footing until well into 2009.
Recessions are nothing new for the country, and indeed the national economy experienced a downturn as recently as the beginning of this decade. But the difference between the current economy and the last recession is that many consumers in the early 2000s were able to tap into the equity of their homes to bridge the gap during the downturn. As a result, consumer spending continued to grow, even though the overall economy contracted. With falling home prices and the difficulty obtaining credit, that is simply not an option for many consumers today.
The current perfect storm of declining wealth, elevated food and energy prices and stagnant wages have all combined to put consumers in a precarious position. Consumer spending plunged 3.1% in the third quarter on an inflation-adjusted annualized basis-its first decline since 1991 and its largest drop since 1980.
During periods such as this, the economy is typically propped up by Main Street sectors-businesses that are the cornerstones of their local communities. Businesses that provide products and services like the local restaurant, market or salon are essential to the day-to-day lives of Americans.
The Professional Beauty Association's new "National Profile of the Salon Industry" illustrates how the American salon industry is an engine of growth for Main Street, even during times of economic uncertainty.
Recessions are nothing new for the country, and indeed the national economy experienced a downturn as recently as the beginning of this decade. But the difference between the current economy and the last recession is that many consumers in the early 2000s were able to tap into the equity of their homes to bridge the gap during the downturn. As a result, consumer spending continued to grow, even though the overall economy contracted. With falling home prices and the difficulty obtaining credit, that is simply not an option for many consumers today.
The current perfect storm of declining wealth, elevated food and energy prices and stagnant wages have all combined to put consumers in a precarious position. Consumer spending plunged 3.1% in the third quarter on an inflation-adjusted annualized basis-its first decline since 1991 and its largest drop since 1980.
During periods such as this, the economy is typically propped up by Main Street sectors-businesses that are the cornerstones of their local communities. Businesses that provide products and services like the local restaurant, market or salon are essential to the day-to-day lives of Americans.
The Professional Beauty Association's new "National Profile of the Salon Industry" illustrates how the American salon industry is an engine of growth for Main Street, even during times of economic uncertainty.
The U.S. salon industry registered steady growth in recent years. Although much of the growth in salon establishments was driven by substantial increases in the number of non-employer establishments, there were also steady gains in the number of employment-based salon locations. Between 2001 and 2006, the number of employment-based salon establishments in the U.S. increased 10%, according to the Bureau of Labor Statistics. During the same five-year period, the number of employment-based businesses in all industries also grew 10%, which illustrates the consistent contribution to the economy of employment-based salons.
Visit probeauty.org/resources and log in with your section password to download the complete 2008-09 edition of the "National Profile of the Salon Industry". The profile is complimentary for all PBA members and $149 for non-members.
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