A Cheap-Wine Index Keeps Hiring On Hold Market watchers look to their favorite indicators to signal when the economy is turning around — things like GDP, productivity or the consumer price index. But for a Massachusetts liquor store, it's when customers stop buying inexpensive wines.
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A Cheap-Wine Index Keeps Hiring On Hold

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A Cheap-Wine Index Keeps Hiring On Hold

A Cheap-Wine Index Keeps Hiring On Hold

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

Here's a snapshot of the economy from some of the latest numbers. Exports are up, which means our trade deficit is down. But last week, the number of workers filing new claims for jobless benefits rose more than expected. Still, analysts say signs point toward a stabilizing labor market.

NORRIS: We're going to begin this hour with a view at the economy from perspective of small businesses. It comes from NPR's Tovia Smith in Boston.

TOVIA SMITH: Despite all the official signs that the economic picture is brightening, most small businesses have their own personal economic indicators they're watching for and most of those seem to suggest that things are just not yet good enough to start hiring again.

Ms. KATE HARRIS (Owner, Crossroads Trade): I'm just not going there. I just won't do it.

SMITH: Three years ago, Kate Harris had six people working the weekends before Christmas at her store Crossroads Trade, an ethnic art store in Brookline. This year, she's got just one. And she says business is still way too volatile to even think about hiring more.

Ms. HARRIS: From day to day it's absolutely unpredictable. Even if business were down, and I could see patterns to it, then I'd be happy to act. But there's no pattern.

SMITH: A few years ago, Tess Enright had 17 employees at her three Tess clothing boutiques around Boston. Now she's down to just six employees for two stores. While her big spenders are still spending, Enright says she won't grow her business until she sees middle-income shoppers opening their wallets again.

Ms. TESS ENRIGHT (Owner, Tess and Carlos): That customer is definitely not there at all, still. People are not shopping the way they used to be, because people are going to be careful and cautious.

SMITH: Enright says she likes President Obama's idea of tax breaks for businesses who hire new workers, but other business owners don't.

Ms. WIOLETTA ZYWINA (Owner, Da Vinci Restaurant, Boston): If I have to hire someone, I'm not going to wait for Mr. Obama to give me $3,000. I would just do it because it's good for my business.

SMITH: Wioletta Zywina owns Da Vinci, an Italian restaurant in Boston. She's cut her staff by more than 10 percent in the past year, and she does need more help. But she says it'd be ridiculous to hire just because of a tax credit.

Ms. ZYWINA: The $3,000 is not going to make me make my decision just to hire a bunch of people to keep them for two months, because after two months I'm not going to be able to keep them because the money will be gone. This makes absolutely no sense.

SMITH: Zywina says while her business is up, it's still not enough to make her comfortable hiring. For her, the sign will be when she can raise entree prices a few bucks without immediately losing customers.

(Soundbite of liquor store)

Unidentified Man #1: Happy holiday to you.

Unidentified Man #2: Thank you very much. Have a good one, all right?

SMITH: At Murray's liquor store in Newton, manager Rich Cataldo says there's only one economic indicator that will make him consider expanding. He's secretly keeping tabs on three customers who work in finance and used to be big spenders, but now buy the two-for-$12 specials.

Mr. RICH CATALDO (Manager, Murray's Liquors): And we're waiting to see if they come back to buying the $10 to $20 wines they used to buy. And at that point, if we see that come around, we know that things are getting better.

SMITH: They are your canary in the coal mine.

Mr. CATALDO: Exactly right, yeah.

SMITH: Do those guys know who they are?

Mr. CATALDO: Oh, no, absolutely not. No. That would spoil the fun then.

SMITH: Last week, Cataldo says one of his canaries bought a $14 bottle of wine. But it was just one of the guys and just one bottle of wine.

Tovia Smith, NPR News.

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