Recession fears grip US consumers
US consumers are increasingly reluctant to spend money
Consumer spending in the US fell in September by the biggest amount in four years, the Commerce Department said.
Personal spending fell by 0.3% last month, despite a rise in incomes of 0.2%, official figures showed.
The drop in expenditure was the biggest since June 2004, and steeper than economists had predicted.
On Thursday, the Commerce Department issued figures showing the US economy shrank at an annualised rate of 0.3% between July and September.
Consumer spending accounts for two-thirds of total US economic activity.
A number of US retailers have reported falls in sales for September, including department store JC Penny, upmarket rival Saks, high street retailer American Eagle Outfitters and online retailer Target Corp.
Low cost retailers Wal-Mart and Costco also failed to meet Wall Street expectations of sales for the month.
A drop in spending had been expected, although not as steep as 0.3%.
Benign inflation
The spending report also showed that consumer inflation edged up 0.1% in September, or 0.2% excluding energy and food costs.
In a separate report, also released on Friday, the US Labour Department said wages and benefits of US workers rose 0.7% in the third quarter, the same increase recorded in the previous two quarters.
Concerns over inflation have abated somewhat prompting the Federal Reserve to seek ways to boost the economy, such as by lowering interest rates to increase borrowing.
On Wednesday, the US Federal Reserve cut its key interest rate from 1.5% to 1%, as widely expected. The relative lack of inflationary pressure in the US economy means the Fed will be able to make further cuts should it wish.
Shaky confidence
Earlier in the week, Conference Board figures showed US consumer confidence at a record low in October, amid falling global stock markets, rising property foreclosures and increasing job losses.
The board said the monthly consumer confidence index fell to 38, down from a revised 61.4 in September and below analysts' expectations of 52.
It was the lowest since the board began tracking consumer sentiment in 1967.
What effect do you believe low consumer sentiment will have on this holiday season and the economy?
Subscribe to:
Post Comments (Atom)
15 comments:
We are gonna have a big problem. The economy is very high. we are going through a recession right now .We dont have alot of money .This holiday alot of prices are going to be high and alot of people is not going to be able to afford nothing.
Jamila Lofton
The effect low consumer sentiments will have on this holiday season and the economy is big. There are serious problems. The economy is bad right now. For this holiday i dont think many people will be able to afford alot of gifts.
arielle lopez
This will effect extremely people expenses.We are not going to be able to expend more in stuff that we need often, because not even in holidays the prices won't be low as they used to be.
*DaliZ Rivas!!
This will affect extremely people's expenses. We are going to be able to expend more in stuff that we need,therefore all the bills will be the things that we might be able to afford,because not even in holidays the prices won't be low as they used to be.
This will affect extremely people's expenses. We are going to be able to expend more in stuff that we need,therefore all the bills will be the things that we might be able to afford,because not even in holidays the prices won't be low as they used to be.
*Daliz RIvas!!
im soRRy the thrid one!!
the problems are goin 2 get bigger. many peole will not afford 2 buy gifts but they will anyway. and this will set the u.s. back even further. the econmy is at a bad point right now.
^^^^^ramell pearson^^^^
To me I feel there is going to be less Christmas shopping!!!!! The economy is taking a huge nose dive, and instead of hiking the prices I feel they should lower prices so that more people would buy things. The US is so backwards and instead of reviving itself its doing the exact opposite.
~~Malika Franklin~~
Since our economy is low, i think the sales on everythimg will rise.
ther will be some disagreements, but i think its the best move move towards our economy.I think alot of tax payers will be mad for spending more money on holiday shopping\
Daniel Rivera
low consumer sentinments will ave a big effect on this holiday. a lot of paretns can not afford to spend as muc as tey did in previous years also a lot of business owners will lose out on coustimers
Edith Santiago
I think this will have a great affect on the properities of stores and companies that sell throughout the nation. Moreover, product prices will increase much wich means less spending, less presents. I don't think I'll be getting as much gifts this yearfor Christmas as I got last year. Luckily my birthday is in December, so that will make up for Christmas presents.
Lisenny Rodriguez
I think that we have a
big problem because the
economy in the us is veri
low so the people well
spend less money for this
season because the food and gifts are to expensive and they don't buy it.
ºJonnathan Quitoº
pd:2
Many things will effect low consumer sentiment on this holiday season and the economy will be effected as well. The recession in which we're all facing and going through now has affected us in many ways. Several big department stores have already filed bankruptcy and it'll just get worst. Because of the great recession people are being extra careful in the way of spending their money. If for example, their holiday budget for gifts were $500 in past holidays this year it might be a drop to $250 half if possible. Along with the recession the cost of living is just going higher and higher. Utility bills are increasing and being a lot more costlier. We must save every penny that comes into our pocket.
Liliany Rodriguez
Well now we not going to see alot of people shopping because the economy is really bad and we would have hight prices than before..
Cristal Acosta_
Post a Comment