In an odd turn of events, consumers actually increased their spending in January by 0.3%. What's strange about this is that sales during the December holiday shopping period actually declined 0.4% as "retailers suffered through their worst Christmas shopping season in five years."
Perhaps after feeling they had been conscientious spenders during the holiday season, shoppers have decided it was time to make up for it. True, there are concerns about the economy, but it seems consumers are either less worried about it or don't feel the effects yet. While the January jobs data has shown a slowdown, it was the first drop in four years and may not be felt overall yet.
So sure, some of the increase in the retail numbers was to be expected as consumers paid higher prices at the pump, but there was also strong demand for new cars as auto sales increased by 0.6% in January. And while sales excluding automobiles and gasoline were unchanged, clothing stores saw an increase of 1.4%, suggesting consumers are holding up.
Analysts don't seem to think the January rebound will last as consumers are facing several problems, not the least of which are the housing correction, the credit crunch and perhaps a slowing job market. With some economists already believing the U.S. is in a recession, it will not take long, they claim, before the consumer feels it too.
Still, Wall Street, not surprisingly, is reacting favorably, as consumer spending accounts for two-thirds of total economic activity and has been a driving factor in the recent expansion. With the stimulus package about to be approved, consumers may have even more power in their hands. And with the Federal Reserve's aggressive easing policy, some may feel that a recession, if it comes, will be shallow and short.
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Reader Comments (Page 1 of 1)
2-13-2008 @ 12:01PM
RB said...
Capitol Clothing Corp ,the Miami, Florida based Boys Clothing manufacturer has a Park Ranger outfit #1421 for kids in their Themed Outfits Collection and is Proudly Made In USA . Other themes include Police,Sheriff, Firefighter, Boat Captain, Golf, Safari, Jr. Zookeeper and many other "fun" outfits . Sizes available are from baby (12-18-24 months) and 2 thru 8 .
Says Richard Behar, president of the 20 year old company. These are not costumes but authentic looking outfits for fun dress-up. We also have a fashion collection of Boys Sets in the latest prints for that "little man" look.
2-13-2008 @ 12:38PM
Ynot said...
Big sales increase on highly discounted prices. Hurry up and invest so they can take what is left of your money. Anything and any lies to keep this false market alive until elections are over.
2-13-2008 @ 12:44PM
dlgorton said...
Why should we be surprised at this. The whole idea of recession has been created by the media because of the "mortgage crisis" which is not a crisis at all but the greedy stupidity of mortgage brokers intent on making money at the cost of regular (though sometimes ignorant) people just looking for a place to live.
Let us get beyond this and look at the real economy that is growing despite outrageous oil prices.
We Americans are a resilient people--but media stop pouring on the contrived bad news and tell us the truth.
2-13-2008 @ 12:56PM
Ynot said...
They never tell the whole story and sugar coat what they do say. You want the truth. Go to the stores yourself and see what the prices are and what is really selling. They are just trying to stall the downturn until you get your tax returns and rebates because they want us to be fools and blow it on more junk instead of paying off bills. Read the articles that said polls showed people were planning on saving or paying off debts with the rebates. Then the analyst response was that will not happen and most will spend the money. Basically they consider American consumers fools.
2-13-2008 @ 1:52PM
Ynot said...
``The consumer is not tapped out yet, which is what everyone had thought,'' said Andrew Seibert, who helps oversee $400 million at Nextier Wealth Management in Pittsburgh. ``The market is looking for every positive it can get at this point.'' I love how they call us fools right to our face and nobody pays attention. NOT TAPPED OUT YET. They won't be happy until they take your last penny. WAKE UP AMERICA!!!! The rich are playing us for fools. They don't lose. Only the ever decreasing middle class and the ever increasing poor lose. DEBT=SLAVERY