Restaurateur behind Evanston’s Central Street Cafe sees economy turning
BY PAUL DAVIDSON December 17, 2011 4:24PM
Evanston Mayor Elizabeth Tisdahl and business owner Mitch Dulin along with Aldermen Jane Grover and Mark Tendam cut the ribbon at Evanston's Central Street Café in August, 2011.
Updated: January 19, 2012 10:57AM
For Mitch Dulin, the time seemed right.
Dulin, a restaurant entrepreneur, opened Central Street Cafe in Evanston in August largely because he wanted to take advantage of low lease rates and sensed the local economy turning up.
“I saw things getting better,” Dulin says. “If I were to wait a year, the lease would cost me 20 percent more.”
Dulin says he paid cash for the renovation of the space — at a cost of $500,000 to $1 million — and might not have gone ahead with the project if he had needed to get a loan.
The 60-seat restaurant, he says, is full for both lunch and dinner, and he turns away more customers than he serves.
All 14 full-time workers were previously jobless, Dulin says.
Four years after the recession officially began in December 2007, economists, businesses and consumers alike have expressed a growing optimism about the recovery in recent weeks. The more confident, if still tempered, outlook is taking shape as the nation seems to be navigating past some big stumbling blocks — such as high gasoline prices — that have impeded growth most of this year.
Some recent encouraging signs:
† Vehicle sales in November rose 14 percent from a year ago to an annual rate of 13.6 million — their best showing since cash-for-clunker incentives drove purchases in August 2009. Economists cite, in part, the recent easing of auto shipment disruptions that followed the Japanese earthquake early this year, as well as a less diffident consumer.
“We’re getting some pent-up demand kicking in where people who have not replaced for a long, long time, particularly if they’re still working ... are deciding it’s time,” says Nigel Gault, chief U.S. economist at IHS Global Insight.
†The unemployment rate last month fell 0.4 points to 8.6 percent, lowest since March 2009. Although the decline was partly due to a 315,000 drop in the labor force as discouraged job seekers simply gave up, employment is up an average 321,000 a month since August, according to the Labor Department’s household survey. Most encouraging: Much of the hiring appears to be by small businesses, which typically fuel job growth in a recovery.
†The housing market, though still anemic and weighed down by foreclosures, is showing small signs of life. In October, pending home sales jumped 10.4 percent from September, and permits for new single-family homes were highest since May 2010. Builder sentiment also has edged up the last two months and is at an 18-month high.
A big reason for the fresh optimism is a pickup in small-business hiring.
In November, small-firm owners increased employment slightly for the first time in five months, according to a survey by the National Federation of Independent Business (NFIB). Small businesses also accounted for more than half of the 206,000 jump in private employment last month reported by payroll processor ADP—the largest gain in almost a year, says economist Diane Swonk of Chicago-based Mesirow Financial.
“Moreover, the initial figures for September and October were revised up, which means that we entered the current quarter on a slightly stronger footing,” Swonk wrote on her Mesirow blog.
More than half of those gains were driven by a rise in small business hires, says Swonk, “which is critical, especially if it is a sign of new business births.”
Credit conditions for small businesses have gradually improved in recent months, according to the Federal Reserve. Ami Kassar, CEO of MultiFunding, a loan adviser for small businesses, says the number of start-ups that seek his help has more than doubled over last year, but loans are still very difficult to obtain.
Some large companies, meanwhile, are also experiencing steady growth. Cargo volumes for Union Pacific, the No. 1 freight railroad, are up 3 percent this year, and CEO Jim Young expects “more of the same” in 2012. Next year the company plans to exceed 2011’s record $3.3 billion in capital spending and double, to 200, the number of locomotives it will buy. Besides girding for growth, the company wants to take advantage of low contractor prices while they last, Young says.
Even so, the recovery remains relatively tepid amid lackluster household income growth and still lacks sufficient momentum to generate enough jobs to significantly lower unemployment next year.
And financial turmoil in Europe could still derail the upswing. Many economists consider a European recession almost certain. That would hobble U.S. exports and cut economic growth slightly, but only a meltdown that paralyzes global credit markets would push the U.S. back into recession.
After expanding at an annual rate of just one percent in the first half of this year, the economy grew 2 percent in the third quarter and is on pace for 3 percent growth in the fourth quarter. Most economists expect uninspiring growth of about 2 percent next year — far short of the three percent-plus needed to make a dent in unemployment.
But Dean Maki, chief U.S. economist of Barclays Capital, expects the economy to grow about 2.75 percent next year. That should be enough, he says, to generate about 215,000 jobs a month in the last six months of 2012 — more than the 150,000 or so that many economists expect — and cut unemployment to 8 percent by year’s end.
Gannett News Service