America's local economy keeps shrinking
Growth slowed for local economies virtually everywhere in the U.S. last year, and is declining again at the start of this year as consumers pare back spending and business growth stalls.
What they're saying: So says business directory service Yelp, which used data from its more than 100 million users to track the number of businesses opening or closing and consumer demand.
What's happening: The Yelp Economic Average had its largest quarter-over-quarter decline in a year in Q4, "fueled by slumps in retail and services businesses."
- The fourth quarter of 2019 marked the fifth straight quarter the measure has shown a level of economic strength weaker than in 2016, when the metric debuted.
Why it matters: "Yelp has information not only on millions of U.S. brick-and-mortar businesses but on the consumer demand expressed by the millions of consumers who view, review, and post photos of businesses on Yelp every day," the company said in a release accompanying the analysis.
- Yelp says its data is able to more quickly identify trends found in GDP, retail sales, purchasing managers indexes and other economic reports released by the government and large private companies.
Yes, but: Yelp's data does not track online shopping or purchases, which is an increasingly important segment of the U.S. and global economy.
The big picture: If Yelp's data is correct, it shows economic prospects are deteriorating for brick-and-mortar businesses of all kinds.
- Even among the strongest major metro areas in Yelp's report, eight of the top 10 show declining growth year over year.
- Retail, food and automotive businesses almost across the board fared poorly, with stores selling mobile phones, shoes and appliances seeing the worst losses.
- Food and nightlife businesses had declining business in every state except Wyoming, Nevada, the Dakotas and Vermont.
Watch this space: Large states and metropolitan areas like California, Texas, Florida, New York City, Chicago and Seattle saw some of the worst scores.
P.S. You can see Yelp's methodology for calculating the economic average here.