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Top 100: 9. The economy

September 5, 2011

While the economy dropped from No.1 on the 2010 list, it still plays a large role in consumer spending. According to the National Bureau of Economic Research, the worst recession since the Great Depression began in December 2007 and came to an end in June 2009. Not that anyone noticed. In July 2009, 29 percent of respondents to the Discover Small Business Watch said their business' economic situation was improving. In October 2010, the figure was 28 percent.

The economy may be in recovery, but the American psyche isn't. Consumers remain wary of returning to their habits of the last decade, when Americans across the economic spectrum piled on credit-card debt and used their homes as ATMs in the form of home-equity loans to pay for vacations and luxuries. During that time, the savings rate plunged to nearly zero. Household debt, including obligations for mortgages and credit cards, rose to approximately 140 percent of disposable income, double what it had been before the boom years.

Based on recent interviews with shoppers, retailers, manufacturers, economists and analysts nationwide, the Associated Press reports that bargain-conscious consumers are shopping at stores they once shunned and are more likely to give store-brand products a try. Goodwill and consignment shops are attracting new customers, and people are putting big-ticket items on layaway rather than whipping out charge cards. (See No. 34.) While the wealthy are spending again, their behavior is much like everyone else's, and they are buying more timeless and classic goods that won't go out of style quickly.

An index of consumer confidence from The Conference Board has ranged from the high 40s to high 50s. A reading of 90 indicates a healthy economy, and that level has not been seen since December 2007, the month the recession began.

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