Oregon Public Broadcasting

The revenue forecast says the state isn't likely to recover all the jobs lost during the recession, until 2014.

The unemployment rate stands at 8.5 percent, so times are expected to remain tough for a while.

But, there are signs Oregon's economy is picking up.

For example, some prices are beginning to climb and the discounts that many businesses offered during the recession are not longer available.

Kristian Foden-Vencil talked to several Oregon business owners about the economy and files this report.

Every month, the Bureau of Labor Statistics sends people out across the country to price a shopping basket of more than 200 products -- from coffee and chicken, to rent and gas.

052312_business2_small.jpgKristian Foden-Vencil / OPB

The bureau's West Coast commissioner, Richard Holden, says in Oregon there are shoppers in Portland, Bend and Salem. And over the last year they've seen prices for clothes increase almost four-and-a-half percent, and the cost of medicines increase three-and-a-half percent.

"People are starting to spend a little more. They're looking for bargains and for value in many cases. But they are starting to spend and so as more money chases the same amount of goods ... the prices begin to rise as a result."

At the Citybikes Workers' Cooperative in Southeast Portland, Tim Calvert, one of the owners, inflates the tires on a pair of new bike wheels.

He says the cost of tires has ballooned. Heavy rains cut production in rubber-growing countries like Indonesia. That's contributed to the rise in prices, along with the improved economy.

"You know tires that are selling for $30 to $40 now used to sell from $20 to $30 not that long ago and it's like wohhh! We have the prices in chalk and even those prices are like uhoh, got to erase them. Ha Ha Ha."

But, says Clavert, the price increase doesn't seem to have hurt business. He estimates activity at the co-op is up five percent over last year.

052312_business3_small.jpgKristian Foden-Vencil / OPB

Beth Hamon, another co-owner at Citybikes, estimates that prices for everything from chain detailers to breaks and seats have increased about 8 percent over the last year. She says the co-op has to pass those increases on to customers. So the question is, how are customers reacting?

"There's always going to be that customer that brings in the catalog from a warehouse on-line retailer and say match this."

Kristian: "Do you honor the price, do you add some percentage. Or what do you do?"

Beth Hamon: "Generally, we go to great efforts to educate that customer as to why we can't honor that price. We sell them on the idea of what we do offer that a warehouse dealer out of state can't, which is when you have a question about your bike, you can roll in the door and we can answer you and we can get you back on the road as quick as possible. Your warehouse retailer is not going to be able to do that."

In general, says Hamon, she hasn't heard a lot of complaints about higher prices from customers. What they do complain about, she says, is $4-a-gallon gas.

But she says, that's actually been good for the co-op because people decide to ride their bikes, instead of driving.

Still, the price of gas is one reason many businesses cite for increasing their own prices.

Anne Taylor runs a landscape gardening operation in Portland. She prunes small trees, with a view to how they look, rather than simply keeping limbs away from power lines and homes.

Driving out to see a customer can be expensive, especially if she has to turn around and drive back because the tree is too big. So she says, to save on gas, she spends more time on the phone.

052312_business1_small.jpgKristian Foden-Vencil / OPBBeth Hamon, co-owner of Citybikes

"When I talk to people, I try to get more of a feel if they're willing to pay the cost to have a tree pruned properly, you know if they're just more interested in having some company hedge them up into any old shape."

She says higher gas prices are costing her an extra $50 a month. She fretted about passing that cost onto customers, but took the plunge in February and was surprised.

"I didn't have any reaction. I try to offer quality work and so they're happy with my work and so nobody had a problem with it."

But not every business owner is lucky enough to be able to quietly pass higher prices onto customers. Biagio Sguera bought the Daily Bagel shop in Klamath Falls a few years ago. OPB caught up with him earlier this Spring.

"Food costs since I've owned it have gone up close to 30 percent. And that's something that you really can't pass onto customers in a tough economy. We raised our prices a quarter after two years and there was a little pushback. It's hard to explain to the retail customer, "well, it costs me thirty percent more to provide you with anything."

The Consumer Price Index for the Western Region is up more than two percent over the last year -- and that includes the volatile food and energy sectors.

But there are a couple of interesting differences between shopping in Oregon and the nation as a whole.

We spend a little less of our incomes on clothes apparently, and a little less on transportation and rent. But can you guess where we spend more ? Alcohol maybe?

Bureau of Labor Statistics spokesman, Richard Holden says on average, one-point-two percent of an Oregonian's income goes to beer, wine and spirits.

"In the U.S. it's less than a percent. It's point-95 percent. So yes indeed, your hypothesis is correct."

Apparently some things are more important to Oregon consumers than others.

OPB's Public Insight journalist, Amanda Peacher, contributed to this story. Sources for this story came to OPB through our Public Insight Network. You can join the network, inform our news coverage and share what you know at www.opbnews.org/publicinsight.

This story originally appeared on Oregon Public Broadcasting.

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