Recession or not, times are tough for some business owners

CHICAGO TRIBUNE

CHICAGO — When economists debate whether the U.S. is in recession, they calculate the thousands of lost jobs and the huge cost of mortgage foreclosures, but Felippa Janik counts cookies and pies.

At family-owned Janik’s Cafe, customers who used to order smoothies with their sandwiches now drink water. People are skipping pie, cookies and cake. By midsummer, receipts had dropped 30 percent from last year, and they’ve stayed down.

“I guess people are just afraid,” Janik said. “When it comes on the news that the economy is really bad, or people are losing homes to foreclosure, they worry about what’s going to happen to them.”

The once-hot economy has screeched to a sluggish, uneven idle. A sharp rise in joblessness, no growth in retail sales, a crisis in the housing market and skyrocketing oil prices have jolted consumer confidence and given the stock market the jitters.

Still, many economists don’t want to declare a recession, even after news last week that the service sector, comprising two-thirds of the economy, shrank in January. The economy still has not experienced two consecutive quarters of a decline in economic activity — a standard litmus test. And some hope the $168 billion stimulus package passed by Congress last week will boost consumer confidence, though the impact of rebates for individuals and tax breaks for business will not be felt for months.

“We don’t have a sign of even one quarter of decline,” said John Elliott, dean of the school of business at Baruch College. “We’re still prognosticating. The trouble is, so many things can be self-fulfilling. If everyone believes we are in the direst of circumstances, then everyone pulls back, and it becomes true.”

Indeed, to many American consumers and business people, the technical argument completely misses the point. Experience tells them the economy is in dire straits, whether it qualifies for the R-word or not.

“I’m sick of all this talk about ‘Are we in a recession? Aren’t we in a recession?’” said Cherry Vujevich, owner of Chicago Fastener, a manufacturing company based in southwest suburban Mokena.

, where sales fell 15 percent last year.

“I keep saying, ‘Why didn’t someone ask me?’” Vujevich said. “I would have told them last year.”