Consumers Cut Spending – Feel Good About It
by Jeannette Di Louie, Assistant Editor, Mt. Vernon Research
Editor’s Note: Our colleagues over at Mt. Vernon research were looking at the retail figures this morning. Some of the things that will be coming out in the next few months will highlight just how bad December and the fourth quarter of last year was. And while Michigan consumer sentiment readings came in slightly higher than expected, obviously spending did not. Apparently consumers felt much better about not spending.
December’s Poor Retail Figures Shouldn’t Have Surprised Anybody
We were all expecting a bad Christmas season for U.S. retailers, and reality didn’t disappoint. Sales for the month of December were just announced this morning, and are the latest reason for the indexes to open lower this week.
In November, sales had dropped 2.1% and they slipped another 2.7% in the last month of the year. As we’ve come to expect to some degree, the news was worse than originally expected… much worse, since a majority of economists agree that retailers would only report a 1.2% decrease in activity.
There’s a big difference between the projections and the actual numbers, but those analysts have history to back up their original predictions. Michael Niemira, chief economist with the International Council of Shopping Centers (ICSC) has analyzed retail sales put out by the government from 1967 onward. And based on that data, he can honestly say that “we’ve never had this long stretch of declines” before.
However, while history is often a great indicator of the future, the last few months have proven that we’re in unusual times. Unemployment is up – though it’s been worse in previous years – and even the vast majority that still do have jobs are concerned that they might soon lose theirs.
This epic of dread is producing natural results, with consumers cutting corners wherever they can. The bad news shouldn’t have taken anybody by surprise after five months of poor retail sales showed a decline in the “shop-‘till-you-drop” mentality.
See the original article at SmartProfitsReport.com.
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