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The Last Bastion of the U.S. Economy Is In Full Retreat
In previous economic slowdowns, it was always consumer spending that kept the American economy afloat. Millions of Americans continued shopping at malls, buying cars, ordering gadgets through the mail and TV and otherwise putting their wallets and purses on the line. It was always the brave American consumer rushing unto the breach to beat off the demons of economic gloom and uncertainty.
But not this time, it seems. Retail sales have now declined for the sixth straight month.
The U.S. Census Bureau announced that advance estimates of U.S. retail and food services sales for December (adjusted for seasonal variation and holiday and…
15Jan2009 | Oxbury Research | 0 comments | ContinuedWill the Loss of Consumer Credit Serve as the Next Economic Aftershock to Further Fuel the Financial Crisis?
U.S. consumers are already losing their jobs at an accelerating rate.
The same thing is now set to happen to their credit lines.
But with so many Americans already losing their main source of income – their jobs – at an ever-spiraling rate, will an economy that derives two-thirds of its power from consumer spending end up mired in its worst funk in decades because those same consumers are now losing their charge accounts?
Before you dismiss the possibility, consider this: The U.S. economy weakened across all regions since the middle of October as it became tougher to get loans and demand for…
4Dec2008 | Money Morning | 0 comments | ContinuedOctober Retail Sales Drop Fastest Pace Ever Heading into Holiday Shopping Season
U.S. retail sales dropped 2.8% in October, the largest monthly drop since the Commerce Department began tallying monthly retail sales in 1992.
The sharp drop in consumer spending is largely the result of mounting job losses – with unemployment filings surging to 516,000 this week – and higher lending standards at banks.
“What you are seeing now is the turmoil in the credit and funding markets playing out into the consumer sector,” Kevin Flanagan, fixed income strategist, global wealth management at Morgan Stanley, told Reuters.
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For the U.S. Economy in the New Year, the Pain Will Precede the Promise
If there’s a proverb that captures the outlook for the U.S. economy in the New Year, it’s the one that says: “It’s always darkest before the dawn.”
Regardless of any formal announcement of whether or not the United States drops into an actual recession, the ongoing credit crisis guarantees a contraction of the American economy by virtually every measure we know. That period of darkness will be marked by a dramatic slowdown in economic activity, as well as by rising unemployment, additional declines in U.S. stock prices, and constant volatility. It could last as long as 12-18 months.
But when the dawn…
10Nov2008 | Money Morning | Comments Off | ContinuedU.S. Markets Dive on Deepening Recession Fears
Weak U.S. retail sales sent domestic markets plunging yesterday (Wednesday), as worries about a deepening recession intensified.
All three major U.S. indices ended the day with heavy losses. At the New York close, the blue-chip Dow Jones Industrial Average Index had posted a steep decline of 733.08 points (-7.87%), to close at 8,577.91. The tech-laden Nasdaq Composite Index dropped 150.68 points (-8.47%), to reach 1,628.33. And the broader Standard & Poor’s 500 Index lost 90.17 points (-9.03%), to settle at 907.84.
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16Oct2008 | Money Morning | Comments Off | ContinuedRetail Sales Down as Unemployment Rises and Home Values Decline
Retail sales fell 0.1% in July, as home values declined, unemployment rose, and consumers cut back on big-ticket spending.
The decline was the first drop in five months and followed a 0.3% up-tick in June, the Commerce Department reported yesterday (Wednesday). Sales at dealerships and parts stores were at the forefront of losses dropping 2.4%. Excluding automobiles, retail sales rose 0.4%.
Automobile sales have been steadily worn down over the past year by the steep escalation in gas prices. Americans drove 12.2 billion fewer miles, or 4.7% less, than they did in June 2007, the Department of Transportation reported yesterday. U.S.…
14Aug2008 | Money Morning | Comments Off | Continued
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