Tuesday, August 16, 2011

Economy: In Consumers We Trust VIII

These days there is a lot of speculation about a new recession, a so-called double-dip recession, in the U.S. But there still is encouraging news from the consumer front.

Today the Reedbook Chain Store Sales Index arrived, which climbed this week 4.7% Y/Y (last week:  +4.8%). This barometer, as measured by a private organization, indicates that consumer expenditure, which makes up around two-thirds of the U.s. economy, keeps up well.

This number may clam the fear that the recent turmoil on stock market cut too deep into consumer expenses. It was feared that the group of the wealthiest might react to falling stock prices, because part of their wealth is held by stock investments and they might now feel less wealthy.

But there are other developments which are more favorable for the consumer:
1. The job market is healing. Jobless claims are falling and the July job report showed that payrolls and average salaries are rising.

2. Also helpful is the easing of the oil price. Since April the price of this important commodity fell on the financial markets from around $110 into the $80s. Therefore consumers & companies have more money in their wallets and need to spend less at the gas pump.

No comments:

Post a Comment