For Many, Economy’s State Lies Between Partisan Views

President Bush has been saying that the U.S. economy has “turned the corner.” Democratic presidential candidate Sen. John F. Kerry, in the wake of Friday’s poor jobs report, quipped that it was more like a U-turn.

But around the country, the feeling seems to be that neither assessment is quite on the mark.

The nation’s economy, by most indications, is continuing to expand at a respectable pace. Business investment remains solid. Factories are churning out goods. And homes are selling fairly briskly.

Yet for all that, the economy can’t seem to get much real momentum going.

If anything, the events of recent months -- soaring oil prices, continued unrest in Iraq and terrorist alerts -- have made many employers and workers nervous, leading to slower consumer spending, shocks to the stock market and sagging job growth.

That picture was borne out in dozens of interviews over the last two days with employers and workers across the country.

Although hardly a scientific sample, these voices underscore what a welter of recent economic data also suggests: The U.S. economy seems to be moving along neither robustly (as Bush has hinted) nor terribly slowly (as Kerry suggested), but at a middling pace where most everybody is treading cautiously.

At Dan’s Vitamin House in Houston, owner Dan Breckenridge, 45, spoke over the whir of blenders mixing smoothies for about a dozen customers.

“I don’t know why people are complaining about the economy,” he said, nodding toward the line for drinks. “It’s not that bad.”

Breckenridge has been in business at this strip mall for 24 years. So confident is he in the future that he recently renewed his lease for an additional five years. He usually employs a staff of three, and said he had no plans to cut back. But neither is he looking to hire additional workers.

“To me, the economy’s not the best, but it’s not the worst,” he said, gliding his hand, palm down, through the air. “It’s just level.”

Norman Black, a spokesman for Atlanta-based United Parcel Service Inc., said the economy looked pretty good from his company’s vantage point. Businesses are busy, and that means more work for firms like his.

Still, Black was circumspect in his assessment of the economy’s durability.

“There are a lot of things out there that people are concerned about, including rising fuel prices,” he said. “This is certainly not the go-go ‘90s.”

For now, UPS and many other corporations are still flush with profits, which have supported hearty business investments. Industrial activity also has been growing, with new orders for factory goods rising in June at the fastest clip in three months.

But consumer spending of late has been weakening, largely because of the ill effects of higher gas prices and rising interest rates.

And that’s crimping overall economic expansion.

Growth in gross domestic product, or GDP, slowed to 3% in the second quarter after swelling at an annual rate of 4.5% at the start of the year.

By recent historical comparisons, consumer confidence remains fairly high, but it seems clear that many have cut back in ways big and small.

Jerry Addison, a 31-year-old systems analyst in Seattle, was among the throng at Pike Place Market on Friday, nibbling on a sandwich while waiting for his girlfriend.

He had a bouquet of flowers beside him on the bench.

“I just bought these flowers for my girlfriend for 15 bucks,” he said.

“They are gorgeous, better than what you get from a florist, but I deliberately made the choice to come here and get them, rather than pay $40 to have a birthday bouquet sent to her office.”

Thousands of miles away in Miami, caterer Jorge Mena has noticed the trend: People are opening their wallets -- “We have had the best summer we have ever had,” he said -- but not in a way that’s unrestrained.

“In the ‘80s and ‘90s, it was a whole different atmosphere,” said Mena, whose business employs 10 people in the kitchen and six in the office.

These days, he said, “everybody is party-oriented, but they are also budget-oriented. They want what in Spanish are called the three Bs: bueno, bonito and barato. Good, beautiful and cheap.”

Although some analysts expect consumer spending as well as the GDP to pick up a bit in coming months, for most people, the top economic indicator is jobs -- and on that score, the last two months have been lackluster.

The Labor Department on Friday reported that employers nationwide had added 32,000 net new jobs in July, a fraction of the 215,000 to 250,000 economists had expected.

That was largely because of tepid hiring in the service industries, such as retail and financial services. What’s more, the government revised payroll gains in June to 78,000 from 112,000.

The poor showing, after a burst of hiring in the spring that seemed to allay fears of a jobless recovery, is likely to rekindle concerns about the underlying health of the economy.

It also raises questions as to whether structural changes, such as technology-driven productivity increases and the outsourcing of employment, may have altered the traditional relationship between economic growth and job creation.

When the job numbers were issued Friday, “it was like, holy mackerel, what’s going on here?” said Greg Palmer, chief executive at Remedy Temp Inc. in Aliso Viejo, which has 235 offices in 40 states.

Although staffing companies such as Palmer’s have generally done well in recent months, he said, “it makes you stop and be a little more cautious and a little bit more watchful.”

The issue of job growth is expected to now move to the forefront of the presidential campaign.

That could spell trouble for Bush, who, with just two more jobs reports before election day, is likely to be the first post-Depression president to complete a term with fewer jobs than when he took office.

On Friday, the Bush administration focused on progress made during the last year, pointing out that payrolls have risen for the last 11 months.

At least some, though, were unimpressed by the gains cited by the White House.

At the Glendale Galleria on Saturday, Lisa Vasilatos had several bags brimming with new clothes -- the first serious bit of shopping she had been able to afford in a year, she said.

“It’s been terrible,” the 28-year-old said. “With a college degree, I can’t get a retail job.”

Vasilatos said she had been getting by with temp work and by selling decks of novelty playing cards.

Meanwhile, Amy Ellis of Boulder, Colo., has been looking for work as a photographer for months, sending resumes all over the world. The 26-year-old is living at home and sometimes out of her car these days.

“I am willing to relocate anywhere,” she said.

“I have a brother in Oakland who lost his job in telecommunications. I have friends in construction in Denver who lost their jobs. As far as spending, there is no money for frivolous things. I don’t go to movies or go out to eat.”

Ellis isn’t pessimistic about the future, though. Instead, she sees this as part of a cycle that will eventually end.

“I think a change in government could stimulate things, but that’s only one factor,” she said.

For Bush and Kerry, the economy looms particularly large in industrial states such as Pennsylvania, which have suffered some of the deepest job losses in recent years and are shaping up to be key battlegrounds in the November election.

Douglas Drass has witnessed a couple of those job cuts personally.

The 25-year-old has worked at a Camera Shop Inc. store at the Springfield Mall near Philadelphia since 1999, moving up from a part-timer to his current position as assistant manager. In his brief career, he has seen the number of full-time workers at his store cut from four to two. The culprit: more technologically advanced equipment, which has allowed the store to multiply its film processing and photo printing work, while requiring fewer people for the job.

Drass works about 40 hours a week and clears roughly $22,000 a year in salary and bonuses.

Still, “I’m not able to live on my own with my salary,” he said.

Although he was able to buy a new Chevrolet Cavalier this year by taking advantage of a no-interest promotion, Drass said his situation was far different from what his parents, both nurses, faced a generation ago.

“At 25,” he said, “they had good jobs, a house and two kids.”

Not too far away at Dan’s Corner Tavern in Landsdowne, about two miles outside downtown Philadelphia, Hollen Stewart shared his mixed feelings on the economy.

A construction manager for a property management firm that has benefited from the gentrification of Philadelphia’s central city, the 47-year-old said he had held up well while many of his friends in the building trades had been out of work. Stewart’s wife, a Wells Fargo loan officer, also makes a good salary.

“I am blessed,” Stewart said.

But, Stewart said, he could lose his job any day, and he was not optimistic about the economy in the near future.

“I’ve put off a lot of things because of job insecurity,” he said. “I am blessed -- but I am not naive.”

Times staff writers Lianne Hart in Houston, Peter Y. Hong in Philadelphia, David Kelly in Denver, John-Thor Dahlburg in Miami and Dawn Wotapka in Los Angeles, as well as Times researcher Lynn Marshall in Seattle, contributed to this report.