Real estate agent Deborah Miles just canceled her cable television subscription and is ordering her kids to spend less time out on the town and more time at home--reading.
Robert Litchfield, a laid-off executive who is tightening his belt this year, is planning to limit his Christmas presents to one for each member of his family.
But stockbroker Dan Carney still regularly dines out with his wife and friends at the best French restaurant in Providence. And business-owner Bob Burke, who just bought a second home on Cape Cod, has started handing out upbeat lapel pins to tout the local economy.
So goes the now-you-see-it, now-you-don't recession of 1990, an economic downturn that still is hitting individual sectors of the economy so selectively that consumers and businesses all over the nation seem baffled by it, uncertain just how to respond.
The forecasts--and the latest economic statistics--signal that the economy is entering a recession. Output is slowing steadily. The housing industry is in a serious slump. And consumers are beginning to cut back on buying.
By all indications, the downturn is at its worst in the Northeast, where the economy began to slide several months before the slump began in the rest of the nation. Economists point to the problems in Providence as a harbinger of what may come nationally.
But even here in New England, the slump is so uneven that many consumers are still debating whether they really have to curb their freewheeling, 1980s-style spending habits to gird for a recession.
Call it Slump Lite.
"This is not a simple, everybody-slows-down-together kind of recession," said Don Walls, research director for DRI-McGraw Hill, a Lexington, Mass.-based economic forecasting firm. "It's real, but it is a slowdown where you are still going to have some people doing well."
Lynn Brown, an economist at the Federal Reserve Bank of Boston who is trying to figure it out too, agrees. "It's an unusual downturn," Brown said.
This is the first 1990s-style downturn: Instead of layoffs in manufacturing firms, such as steel and auto plants, the slump has shown up mainly in the service and real estate sectors--bank cutbacks, foreclosures on vacant office buildings and retail store closings.
In many ways, it is a slump that is a reaction to the excesses of the 1980s. Financial institutions, under pressure from regulators, are slashing credit, forcing many shakier businesses almost to the wall. Services such as advertising are beginning to feel the pinch.
"I'm in banking, and my wife is in advertising, and neither industry is very secure right now--so we'll be cutting back on big purchases," said Dennis Moore, a manager at a subsidiary of the troubled Bank of Boston, which has just announced early retirements for 750 managers.
Tom Anton, a public policy analyst at Brown University, said the major difference between the current slump and the recessions of 1981 and 1982 is that this one is hitting white-collar rather than blue-collar workers.
"So we are getting the kind of effects that are not as easily seen," Anton said.
Indeed, the biggest impact of the slump so far in New England has come from the ongoing contraction in the region's banking industry, which has brought on a credit crunch that is making it much more difficult for consumers and small businesses to borrow.
Briggs of Providence, an upscale men's clothing store, has just been forced into bankruptcy proceedings because its bankers canceled the store's line of credit--despite the fact that Briggs was keeping current on its loan repayments.
"Banks are imposing very tough credit limits, and some of the requirements are impossible to meet," complains Pete Williams, the owner of a small construction firm in East Providence that has been hit by the squeeze. The company has just laid off six employees as a result.
Still, many analysts believe the recession will be mild precisely because it is hitting upper-middle-income Americans, who are best able to weather a downturn. They are relatively affluent, with job skills, savings and working spouses to help see them through.
So, while those most affected by the downturn may run into credit problems as their household income dips, they may not be as likely to end up having to apply for unemployment insurance, as were the victims of past recessions.
In fact, despite the weakening in the economy, the jobless rate here in Rhode Island has remained stable in recent months, and it still is at 5.9%--only about half of the rate posted during the 1982 recession. Nationally, the jobless rate is 5.7%, compared to 9.7% in 1982.
Economic researcher Walls points out that this is the first slump America has experienced since the two-income household became so prevalent. "There is no question that layoffs tend to be less disruptive to spending when you've got one out of two people in a house still working," he said.
That's Robert Litchfield's salvation right now. Laid off five months ago from his job as manufacturing manager at a firm that makes home heating pumps, Litchfield now relies on savings--and his wife's salary from her job at a clothing store--to get them through.
"We're being very frugal--we're cutting off the heat in some parts of the house," he said. "But my wife's job is a tremendous help. I think a second income is helping a lot of people in my position to get through this thing."
The graying of the population is also cushioning the blow, since older workers, who more often have their homes paid for and have other assets on hand, tend to be in better shape financially than younger workers.
Tom and Joyce Collard, East Providence teachers, are actually spending more on extras than they did two or three years ago, even with two children in college. The difference: Joyce Collard recently went back to work after years at home rearing the children.
"If we didn't have two in private colleges right now, we'd be buying a bigger house," Tom Collard concedes. "This is the first time we've had extra money in a long, long time."
And some sectors of the economy, both here and around the country, have seemed immune from the current slump. The decline in the value of the dollar, which makes American goods cheaper overseas, is catapulting slimmed-down American manufacturing firms into an export boom.
Jim Hoffacker, owner of C. O. Hoffacker Co. in Cranston, R. I., just bought $750,000 worth of new equipment for his machine-tool company and is putting all 80 of his employees on overtime to keep up with surging demand.
But although this slump so far seems modest, it has nonetheless had its impact on the attitudes of consumers. Analysts say many New Englanders view this slump as much worse than it really is largely because it followed one of the biggest booms the region had experienced.
This fall's election results here in Rhode Island proved to be a barometer of consumer attitudes. Rhode Island's incumbent Republican governor, Edward DiPrete, was defeated by a stunning 3-1 margin, largely because of voter dissatisfaction with the local economy.
"The bottom line is that people are more morose than is warranted by the facts," observes Nicholas Perna, chief economist at Shawmut Bank in Hartford, Conn., who regularly surveys consumer attitudes in New England.
Perna notes that his consumer confidence index for the region has already plunged to less than half of the lowest levels it reached in the last recession, "largely because of how great things were just two or three years ago."
As a result, even quite affluent consumers here have started to cut back on spending long before they have felt any real suffering.
Providence restaurateur Bob Burke said that when he recently asked one customer why she stopped eating lunch out each day, "she said that she had read that people should cut back"--even though she clearly wasn't suffering herself.
"This is a woman who could eat out every day for 30 years and not make a dent in her money," Burke said.
Meanwhile, businessman Tom Tanury is thinking about cutting back in anticipation of a further slump--slashing his household costs even though the small metal-plating business he owns is still doing well.
Tanury is considering selling his house in suburban Barrington, R. I., to move into a smaller and cheaper one. And his wife just decided to settle for re-upholstering their old furniture. "My business is OK this year, but my real fears are about next year," he said.
Dan Costa, a free-lance construction project manager, also is preparing for the worst, even though his income is now ahead of last year's levels.
He is renting out his summer place until 1992--to get out from under the extra monthly housing payments--and he has canceled a long-planned January vacation to Brazil.
Cutting out such luxuries "doesn't mean the bottom is falling out," Costa said. "But it's the way middle-class people respond."
But some businessmen and economists fret that such recession talk eventually can have a real impact on consumer spending--and, ultimately, may turn into a self-fulfilling prophesy.
"If you asked a Rhode Island car dealer if his place was for sale today, I think at least 80% would say yes," sighed Tom Flurkey, a Providence-area Chevrolet, Buick and Subaru dealer who has just laid off 20 employees.
And East Providence florist Gerald Lynch complains: "Men just aren't buying roses for their wives. Either there are a lot of bad husbands out there, or they are really cutting back."