An upswing in recent teen spending is being heralded as a sign of economic recovery.

By most accounts, teenagers are ideal consumers: Typically unhampered by debt, bills and mortgages, they spend freely and impulsively. Unlike their time-strapped parents, they hit the malls frequently and stay longer. And peer pressure at school makes it easy to justify dropping all of last week's allowance on the latest Lady Gaga album, Xbox 360 video game or premium jeans.

So retail industry watchers were alarmed when teen spending plunged during the recession. "Bank of Mom and Dad -- on pretty much all income levels -- basically shut down in the back end of '08 and the beginning of '09," said Christine Chen, a retail analyst at Needham & Co.

But now teen shoppers are making a comeback. For two months in a row, teen retailers have soared past sales expectations. Notably, Abercrombie & Fitch Co., known for its sexy advertising and casual-but-pricey fashions, snapped its 20-month streak of negative sales with an 8% increase in January.

Teens are hanging out at the mall after school again, goofing around with friends in dressing rooms, snacking on junk food at the food court -- and giving retailers hope that they'll help kick-start a greater wave of spending industrywide.

"Whether it be sports equipment, whether it be athletic footwear, whether it be fashion, whether it be electronics, the teen market is showing signs of life and positive growth," said Marshal Cohen, chief industry analyst at market research firm NPD Group.

p>Teens today are spending about 6% to 8% more in general compared with a year ago, Cohen said. "Clearly the teen is leading the charge when it comes to the return."

Source: Los Angeles Times
http://www.latimes.com/business/la-fi-cover-teen-spending28-2010mar28,0,739399.story