Books: Weightlifting In Bed

 

(Drivebycuriosity) - I have to confess: Sometime I`m conservative. I stick to my library, collected in decades. I own no e-book reader yet. 

In these days I´m reading a very heavy volume: "The Power Broker" from Robert A. Caro. The book has more than 1.200 pages. My scale tells me that the book weights 1.6 kilogram (almost 4 pounds). 

Usually I read the book in bed before sleeping. Changing pages is like weightlifting in bed. Now I`m thinking about buying e-book reader.

Economy: In Consumers We Trust VII

Oh, what a week! The stock markets tanked and the U.S. debt got downgraded by Standard & Poor`s. But the U.S. consumers had a good week. Really!

American employers added more jobs than forecast in July and wages climbed, reported Bloomberg yesterday. Payrolls rose by 117,000 employes, the jobless rate dropped to 9.1%. Average hourly earnings climbed 0.4%. No sign of recession yet.

But the best news came from the financial markets. Last week the price for oil plummet 9% to $86, in April oil cost on the financial markets $114, around 30% more! Other commodities also got cheaper.  A big relief for the consumers.

Both developments improve the financial situation for the consumers. They got more jobs and higher wages on average and they have to spend less for energy & food now. Both developments are filling their wallets and should beef up the retail sales in the coming weeks when the important back-to-school season begins. A stronger growth of the consumer expenditures should rekindle the staggering economy and prevent a recession.

This situation is very different from 2008 (drivebycuriosity). Then the price for oil exploded to $147, other commodities also got more expensive, even though the recession had already started then. Then the high commodity prices made the situation worse. The high expenses for gas, heating oil & food forced many consumers to cut spending for other goods, even for their mortgages. Now falling commodity prices in combination with a healing job market are helping the economy.

Economy: In Consumers We Trust VI

Do you believe that a new recession is beginning now? I don`t. One of the reasons is the strength of the consumer expenditures.

The New York Times writes: Sales of luxury good are recovering strongly ( nytimes.com ).  The paper reports "the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores are more than recovering — they are zooming".

In July, the whole luxury segment had an 11.65 increase, the biggest monthly gain in more than a year, according to the research service MasterCard Advisors SpendingPulse.

Ok, the so called luxury goods aren`t the whole economy, but they are a big part of it. And as long as other parts (discount shops, department stores, restaurants, teenager apparel, amusement parks) are also doing well as this series shows, the motor of the economy is still running.

Economy: In Consumers We Trust V

If we believe the media the U.S. economy is very weak and approaching the next recession. But the news from the consumer front is still encouraging.

The blog platform Seeking Alpha writes that amusement park operators reported higher admission revenue for July:  Cedar Fair +5%, Six Flags +9% and Disney +5%. The king of the month was Comcast's Islands of Adventure's park which impressed with a 20% gain over the last year.

The data show that the consumers are still willing to have fun and to spend more money for it. It seems they don`t share the fear we see on the financial markets now. Maybe investors could learn from the consumers.

Economy: In Consumers We Trust IV

Doom & Gloom rules. It seems the stock market is pricing in a new recession now. Therefore media & investors didn`t show much interest for positive news today.

Now wonder that the positive reports of the retailers were almost ignored today. The back-to-school season got a strong start, reported AP on Yahoo Finance (finance.yahoo.Retailers  ). A number of retailers reported July revenue that beat Wall Street estimates, including discounter Target, department store Macy's, and luxury chain Saks.

Bloomberg ( bloomberg ) wrote that U.S. retailers including Limited Brands Inc. (Victoria´s Secret) reported July sales that exceeded analysts’ estimates as consumers kept spending on clothing in the face of higher food and gas prices.

Retailers that cater to higher-income shoppers have fared the best in the difficult economy, claimed the AP report. The biggest standouts have been luxury retailers led by Saks Inc., which had a 15.6 percent increase for the month. That was much higher than the 8.5 percent forecast.

Wholesale club operator Costco Wholesale Corp. also managed to attract higher income shoppers and others who like the treasure hunt experience in its stores. The company, which is based in Issaquah, Wash., said revenue from stores open at least a year climbed 10 percent in July, compared with the 8.6 percent analysts surveyed by Thomson Reuters had predicted.

Target, which has been beefing up its grocery business, said revenue at stores opened at least a year rose 4.1 percent in July as shoppers picked up more groceries and health and beauty products (AP). Target said consumers spent more per transaction and back-to-school revenue is off to "a solid start," reported AP.

Many department stores like J.C. Penney and Macy's also had respectable results, as they drew shoppers in with exclusive merchandise and sales on select items, tells us AP.

These facts almost drowned in the deluge of reports commenting the tanking stock market. But it seems the economic reality is much better than the sentiment. Maybe a reason to invest in stocks again.

Economy: In Consumers We Trust III

Oh, what a grief. Media & stock markets are speculating on a new recession now. But there is more strength in the world economy than the gloomy sentiment shows.

Take a look on MasterCard. Today the global payment process company reported strong growth (bloomberg  ). Its second-quarter profit jumped 33%, revenue rose 22% to $1.67 billion.
The management said, the number of transactions they handled rose 17% . Both credit and debit card use rose around the world, with debit growth over 22%.

This shows that consumers worldwide are still in spending mood and raise their expenditures. The motor of the world economy, the consumer expenditures, is still running.

Economy: In Consumers We Trust II

These days the sentiment is very bad. If we believe the media many investors are betting on a new recession now. But at least one group doesn`t care about all the gloom & doom: The teenagers.

This Bloomberg report (bloomberg.com  ) is encouraging: "Spending on clothing and shoes in the back-to-school season, the second-largest sales period of the year for retailers, may rise to $28.8 billion in the U.S., up 3.6 percent from $27.8 billion a year earlier, according to the New York- based International Council of Shopping Centers".

That shows that at least one group of consumer seems to be willing to expand spending despite the gloomy sentiment in the media. Bloomberg reports that teens want to invest in "a new kind of style to make impression", a fundamental consumer behavior.

Ok,  this is just a small group and cannot save the whole economy. But its a sign of confidence and trust in the future.

Maybe we can learn from them.