Making ends meet in the Bay Area

SAN FRANCISCO Fewer Californians are working and the unemployment rate is now at 5.9 percent -- almost a full point higher than this time last year. Shoppers are spending less. The commerce department reports that consumer spending was flat in January, once inflation was taken into account. We're seeing the effects of tough times on the stock market: pushing the Dow down 316 points. That's 2.5 percent plunge. Of course, what happens on Wall Street affects Main Street. Prices are way up on just about all the staples. The engine driving the US economy was consumer spending. But today, the US Commerce Department said that engine has stalled -- spending was flat for the second month in row. "People know there's going to be a lot of uncertainty faced with what's going on. Faced with uncertainty, people want to hedge that. People are spending less because people are worried. my personal feeling is that we probably are going to go into a recession," says Jonathan Berk, UC Berkeley Haas School Of Business. And prices are up. There is already $4 a gallon gasoline Oakland. Even staples like a loaf of bread are up big time. In the last year, bread costs 12 percent more. Eggs are up 40 percent, milk up 26 pecent, spaghetti 18 percent more, and Ground beef is 7 percent more. That has some economists batting around the word stagflation -- inflation and recession at the same time. Shoppers say they're obviously still buying food, but they are intent on hunting down bargains. "I know whenever gas prices go up, everything goes up -- sky high. You know, what can you do? You just look for the best prices you can find," says one shopper. "I don't buy very expensive eggs. I go to different stores to see if I can get the cheapest thing," says another troubled shopper. Among retailers, middle of the road stores are the hardest hit. " A lot of the impulse purchases are starting to fade away, starting to disappear and in some cases, in some industries that can be 25 percent of the business," says Marshall Cohen, Chief Retail Analyst, NPD Group Some consumers say they're ready to get back to basics. "I was just talking to my cousin who was saying maybe what we need to do is start having our own farms-- have neighborhood farms so we can grow our own stuff."