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.

• Bed Bath & Beyond (BBBY) – Shoppers “Didn’t Have the Time.”
• Retailers look to Cyber-Shoppers
• Children’s Place Retail Stores Inc. (Nasdaq: PLCE): Stock of the Day

Sign Up now and receive this Free report: Collect 122% in the Next 12 Months From Gold's Surge.

The Single Best Investment for 2009

Forget another stimulus package. Or retreating into "safe-havens" like cash and gold. All you need in 2009 is a small exposure to the "secret" White Cap Index.

It's up as much as 171% straight through Wall Street's meltdown. And one of the latest stocks to be added - an Internet-related venture capital company - is up over 100% since its inclusion into the Index.

Just weeks from now, we'll add another White Cap stock to this market-trouncing index. To get a sneak peek, click here for full details.

Comments

Check out our selection of daily Investment Research:

We Respect Your Privacy

---

What is Investment U?

Since 1999, Investment U has provided impartial, no-nonsense investment advice on how to build long-lasting wealth.

---

Recent Articles

Platinum Services

The Oxford Club is an exclusive, global network of investors, who collectively participate in the pursuit of prosperity and wealth. The Club is renowned for its market-beating, tried-and-true investment principles.

The White Cap Report exclusively identifies companies, White Caps, which - by being among the earliest to gain traction - have secured dominant positions within untapped, billion-dollar markets.

With an elite trading team at the helm, the Xcelerated Profits Report shows any investor how to "invest like a pro," using high-level, yet easy-to-execute strategies that "xcelerate" profits while minimizing risk.

---