Cosmetic Surgery Decline Bodes Ill For Economy - WSJ

Includes: CUTR, MNT
by: Judith Levy

A slowdown in cosmetic surgery appears to be the latest indicator of a slowing economy, the WSJ reported Saturday. Doctors attending a meeting of the American Society of Plastic Surgeons in Baltimore said consumers are hesitating before committing to elective procedures. "This whole mortgage credit crisis is making people think twice," said Pittsburgh plastic surgeon J. Peter Rubin. At the quarter-ending conference call of breast-implant manufacturer Mentor Corp. (MNT), CEO Joshua Levine said plastic surgeons are seeing a falling off in cosmetic surgery consultations. "If we're going to have a real problem in the broader economy, we won't escape that," he said. Aesthetic laser manufacturer Cutera Inc. (NASDAQ:CUTR) announced it will cease providing financial guidance to investors because "a number of factors, including recent signs of a slowing market growth rate, have made it more difficult to accurately predict our future financial performance." Consumer spending represents 70% of the U.S. economy, and the combination of dropping home prices, rising energy prices, and the credit crunch are reducing spending enough to ring alarm bells about recession. Discretionary spending, which includes airline tickets as well as brow lifts, is particularly susceptible to economic swings. On Friday, the Reuters/University of Michigan's consumer sentiment index posted a decline in early December to a fifteen-year low (except for the month following Hurricane Katrina; full story). Still, economist Dean Croushore does not believe declining consumer confidence necessarily portends declines in spending. "Pay attention to what people do, not what people say," he said. "As long as people's incomes are doing fine and they have money to spend, they'll spend it."

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