After two months of positive growth (relative to the same months last year), sales tax collections for the county and town saw a slight 3.08 percent decline in October, according to a report released late last week by the Colorado Department of Revenue.
However, the Chamber of Commerce reported that sales were bustling during its fifth annual Parade of Stores event held during the first weekend of December, with a 155-percent increase of reported sales from last year’s event. In fact, Chamber Director Mary Jo Coulehan claimed that those sales were even higher than estimates (based on numbers of contest tickets issued for the event, since some shoppers did not fill out any tickets).
Regarding the success of the program, Coulehan said, “We feel that the growth is tremendous ... a terrific success. The stores are reporting a good weekend that weekend with shoppers taking advantage of no tax and the sales offered.”
This year, The Parade of Stores not only offered a waiver on local sales tax on purchases, but also a “frequent stamp program” where shoppers had cards stamped (at participating stores) with a chance to win a prize from each of the stores. According to Coulehan, 48 stores participated this year – up from 44 stores in 2009. The event also included a contest in which, for every $10 that a shopper spent, the customer was entered into a drawing for one of three vacation getaway packages.
“We were very encouraged by the success of this year’s program,” Coulehan said.
Yet, despite the Chamber’s positive report, one weekend does not a month make; total sales tax receipts for December will be reported mid-February. However, since December performed better than any month during five out of the last six years, Coulehan’s largely anecdotal indication for a booming holiday shopping season could provide a prescient outlook for positive end-of-year sales tax revenues.
Nonetheless, October’s sales tax revenues report indicates a local economy still struggling to rebound from almost two years of steady declines. Still, that decline is decelerating at a reassuring pace: year-to-date receipts are down 2.83 percent from the same time last year, compared to a year-to-date decline of 8.74 percent reported as of October 2009. Likewise, as late as July of this year, year-to-date declines were still at almost 5 percent, relative to sales tax collections during the same period last year.
While the news is not great for local merchants, it is less bad than it has been for nearly two years.
Indeed, the sting diminishes if receipts are compared to those averaged over the previous two years’ revenues: October 2010 revenues are down 7.2 percent relative to the same month in 2008-2009; October 2009 was down 11.11 percent relative to Octobers for 2007-2008.
Again, year-to-date declines show a decelerating trend in 2010 when compared to two-year averages: 7.27 percent this year compared to 8.9 percent the same time last year.
If the Chamber’s report appears to be good news, it reflects national numbers indicating a better than expected holiday shopping season.
According to a U.S. Commerce Department report released Tuesday, retail sales climbed for the fifth straight month in the U.S., up .8 percent over the same month last year; over the past three months, retail sales have risen at a 7.8 percent annualized pace.
Since consumer spending accounts for over 70 percent of the U.S. economy, retail sales numbers are closely monitored by economists and investors alike. As such, analysts have revised growth forecasts for the final quarter of this year, projecting a 2.9 percent growth in gross domestic product, up .4 percent from last month’s forecast.
Unfortunately, most analysts agree that the slight boost in GDP growth is not enough to ease unemployment numbers that remain unacceptably high — unemployment in the U.S. hit 9.8 percent in November. While not a clear economic indicator, unemployment is nonetheless an indispensable factor when predicting the potential for further growth. With GDP largely dependent on consumer spending, fewer Americans with jobs means fewer dollars circulating in the economy as the unemployed provide for basic necessities rather than purchasing big ticket or luxury items.
In Archuleta County, unemployment rose from 8.9 percent during September to 9 percent in October. The Colorado Department of Labor and Employment will release local unemployment numbers for November during the final week of this month.
While October’s 9-percent unemployment is the so-called official U3 number (representing first-time unemployment claims added in with ongoing claims for unemployment insurance), that number does not paint the entire picture of unemployment county wide.
Neither the CDLE nor the Bureau of Labor Statistics (BLS) reports the U6 unemployment rate at the county level — an alternative measure which counts part-time workers desiring full-time work, along with numbers of unemployed workers too discouraged to have looked for jobs. As such, October’s U3 9 percent unemployment number may only represent a portion of actual unemployed (or marginally employed) workers in the county.
Sales tax reports and further unemployment numbers over the next few months should provide a clearer picture of how the economy is faring in Pagosa Country; for now, that picture remains murky.
Nevertheless, if Chamber reports reflect a holiday season trend, and if the slowing decline that has trended over the last few months continues, Pagosa Springs and Archuleta County may have finally weathered the worst of the recession, with hopes for better times ahead.