Monday, July 16, 2012

Breaking News .... Consumers on Strike?

Our U.S. economy is 70% dependent on consumer spending. The rest of the world's economies need our consumer spending to export their production into our markets.

But U.S. consumers are on strike, it appears, and for good reason. We'll talk about this later, but for now here's the latest as just reported in Retail Sales Drop Again:

"U.S. retail sales fell for the third consecutive month in June, the latest sign of a slowing economy.

Retail and food service sales decreased 0.5% last month to a seasonally adjusted $401.52 billion, the Commerce Department reported Monday. That is the first time since 2008 that retail sales have fallen three months in a row.

Economists surveyed by Dow Jones Newswires had forecast a 0.2% rise.

Retail sales are an important component of consumer spending, which makes up about 70% of demand in the U.S. economy. Early this year, household spending helped the recovery.

But consumers now appear more cautious as unemployment remains high, house prices low and the global economy uncertain.

Consumer confidence tumbled in June and in July fell to its lowest level since December, according to the latest Thomson Reuters/University of Michigan survey of consumer sentiment.

Policy makers at the Federal Reserve have worried that demand might not be strong enough to propel faster growth and job creation. And so far, data from the second quarter of the year show that the recovery is slowing.

Monday's report showed that Americans spent less on a wide array of goods in June, including building materials, furniture and sporting goods.

Auto sales have been a bright spot in an otherwise tepid recovery. But motor vehicle and parts sales were down 0.6% in June, Commerce said.

Excluding autos, retail sales slid 0.4%, after declining 0.4% the previous month.

In a positive sign, spending at gasoline stations dropped 1.8%, reflecting lower fuel prices. That should leave consumers with more money to spend elsewhere.

Excluding gasoline, retail sales were down 0.3% last month.

And nonstore retailers, a category that includes online sales, rose 0.5% in June. Clothing and food and beverage store purchases also increased."


More to come later about what this means to our and the rest of the world's economies for the next several years at least.

And maybe much longer than that, depending on what We the People decide to do about all this entitlement big government knows best state of affairs.

Thanks. Bob.

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