Turn up any stone and you will find reason to be down on the prospects for economic and market recovery. Housing is in major crisis; the subprime mess is only now beginning to unfold; inflation – even core inflation – is not a pretty sight; oil will be at $100+ in ten days or so; and the dollar is worthless even in Canada. And these are just some of the indicators of real trouble as we roll into the holiday season. But all these are minor compared to what is just now coming down the road – and I am not talking about international crises and the real probability of terrorist attacks.
Rather than turning up stones, one has the strong urge right now to get under a big one and hide. If you put all that is going wrong together, and all that could happen from outside our borders, it is enough to turn even the most optimistic into a downright pessimist. And the American consumer is fast becoming dangerously pessimistic. Numbers from retailers – almost all of them – are bad and getting worse. Consumer sentiment for November is at the second weakest reading since 1992. Although measures of consumer attitudes are typically not good leading indicators of spending, this time they really are. We are all consumers and we know how we feel and how that is going to affect our spending. Just imagine the impact on our economy of many millions of consumers holding back on better stuffing and cranberry sauce or the latest electronic product and toy from Europe as we move into and through Thanksgiving and Christmas. It is not going to be pretty.
There is every reason to believe (in fact, there appears no other realistic scenario) that spending this holiday season will be decidedly lower than in recent years and that the impact of all this will have hugely negative affect on the economy. As if we needed more, this will be crushing.
Related Articles:
Top secrets to beating retailers at the holiday-shopping game by ktexas - Nov 21, 2007
When people think something is better when it costs more by ktexas - Jan 22, 2008
Consumers Tapped Out - Maybe Yes This Time by Thomas Bivens - Oct 16, 2007.
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