ERIC WESTERVELT, HOST:
Another big move in finance this week you may have missed - Dollar Tree bought up Family Dollar. It's a marriage made in cheap plastic goods heaven. Dollar stores were doing brisk business throughout the recession but now the economy is recovering. Yesterday the Bureau of Labor Statistics released its jobs report for the month of June. For the first time since 1997, the economy added more than 200,000 jobs for six months straight. Though, the jobless rate remains stuck stubbornly mediocre, at 6.2 percent. People are still worried. That's clear at a Dollar tree in LA County where there are still a lot of people looking to stretch their dollar. Latonya Wright has an armful of silver insulated bags. She's shopping for her son's frozen dessert business.
LATONYA WRIGHT: You take each day at a time. Some days I have money, some days I don't.
WESTERVELT: Can I ask about the economy too? For you, how do you feel about the economy right now?
WRIGHT: You know what? It's hard to tell because you listen to the news and they say the economy's bad and stuff. But when you go to the malls or drive past any stores, you see people shopping, so.
WESTERVELT: She's right. Yesterday the Commerce Department announced consumer spending has grown by two and a half percent this quarter. But at the same time, federal statistics show that the poorest Americans are earning less than they did a decade ago. And it's not just the lowest-income folks shopping here; more than half of American shoppers have been to a dollar store in the last month.
UNIDENTIFIED CHILD: And I got these.
UNIDENTIFIED WOMAN: Fake mustache.
WESTERVELT: Sebastian Garcia-Vinyard is here shopping with his wife and two sons.
SEBASTIAN GARCIA-VINYARD: It's a low-cost treasure hunt is what it is, right? Because they can pick anything out and it's a buck.
WESTERVELT: Can I ask you how you guys feel about the economy - in general, just in terms of your own feeling?
GARCIA-VINYARD: Neutral? Yeah, I don't see it moving for me sharply in any one direction. So I would say, status quo.
WESTERVELT: In fact, almost most everyone I talk to here said the same thing - the economy doesn't seem to be getting any better or really any worse. I asked Zoe Chace of NPR's Planet Money why people still feel like the recovery is stuck in low gear?
ZOE CHACE, BYLINE: So the big story out of the jobs numbers this week probably is about wages. So wages aren't really going up. People aren't getting a lot more money as the months are going by. And the reason for that is that there's actually still a lot more room for hiring. The unemployment rate is not back to, sort of, a full employment level where employers would really be looking around and trying desperately to hire people, a lot of competition for jobs because so many people are working. That's not the case. Until the unemployment rate, you know, gets a little bit lower and employers are really competing to hire people, wages are going to stay kind of where they are. And that's what we're seeing now and that's what we'll probably be seeing for the next couple months.
WESTERVELT: Zoe, what do you think some of the factors are on why companies are holding back a little on hiring more?
CHACE: You know, something that we really see is that companies are reporting pretty high profit margins. You know, companies are doing really well. You can kind of see that in how the stock market is doing. And then these earnings reports come out and companies seem to be making a lot of money. But a lot of the reason that they're making a lot of money is because the recession kind of shocked them. Companies got leaner, they started to kind of do more with less. Also invested in automation, basically, you know, robots instead of people to make them, sort of, more productive. The thing is though, the companies are maybe more profitable but they are kind of sitting on the money. They're not really spreading it around the economy. You can see a lot of uncertainty out in the world still and companies want cash on hand, in case there's another shock to the economic system.
WESTERVELT: So what are economists and market watchers like yourself thinking about, you know, when things might get better for average folks in the U.S.?
CHACE: You'll probably continue to see, you know, good headline numbers about the economy. But the thing to really watch is wage growth, people actually getting more money in their pockets. When you see wage growth, it shows that there's real competition out there among companies to hire workers. Workers are going to have more money in their pockets, which means they're going to be spending more which creates a sort of virtuous cycle. Basically, companies see more demand, they want to expand more, hire more workers. Workers get paid more; more money in their pockets. That's when things start kind of humming along and everybody starts to feel better.
WESTERVELT: Here's to the virtuous cycle. Planet Money's Zoe Chace. Thank you.
CHACE: Thank you.
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