News / USA

Small Businesses Offer Taste of Economic Growth

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Peter Fedynsky

A flurry of upbeat reports show a U.S. economy recovering from the worst recession in decades and headed for expansion.

But this week's improved figures for housing, jobs, rising stock prices and modest inflation, represent a few measurements of growth.

At a small business in Jersey City, New Jersey, Felicia Grasso is hoping to contribute to the growth in her own unique way.

Since opening her cupcake store, Sophie Sophia, two months ago, she says treats she bakes bring cheer and represent an inexpensive symbol of better times.

"It’s something tangible right now," she says. "[For] people that have fallen on hard times, the cupcakes are not very expensive."

Grasso's shop, with two employees, is just one of 14 retailers on the ground floor of Hamilton Square, a new apartment building that developer Paul Silverman says is directly responsible for 150 jobs, and indirectly responsible for hundreds more.

"FedEx delivers to the property, UPS is delivering; the service companies -- the window washer that’s there every day, the air conditioner repair people, the doormen that are in the building," he says, adding that he secured a loan to develop Hamilton Square before the 2008 financial crisis.

Otherwise, he explains, the ensuing credit crunch would have blocked the project. But he says banks seem ready to lend again.  

"I wouldn’t say it’s back to the 2005-2006 levels of interest, but we have banks calling us now, which is a great thing," he says.

Nonetheless, Sam Stovall, chief investment strategist at the Standard and Poor’s market research firm, says banks are cautious.

"I think the concern though is still that banks are only calling up those people whose credit quality is pristine," says Stovall.

Business owners are borrowing carefully, he says, noting continued concerns about high U.S. unemployment and economic uncertainty overseas. But, he adds, consumers are tired of holding back.

"They’re tired of denying themselves going out and spending, and they spent going into the holidays and, at least so far, are continuing to do that," he says.

But even for those consumers who remain extra cautious, seeking only a small reward, proprietors like Grasso are well positioned to deliver.

"You don’t have to spend a lot of money to get that feeling, and it’s right away, it’s gratification, it’s your favorite flavor," says Grasso. "You’re having a bad day and you come in and, ‘oh, she has lemon today -- that brightens up my day.' "

U.S. employment and retail sales improved slightly in January, an uptick in which Felicia Grasso’s cupcakes played a small -- and customers might say tasty -- role.

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