U.S. stocks edged down Friday on concerns about consumer spending after an index of consumer sentiment fell to a 16-year low and Best Buy warned that shopper traffic dropped after the year-end holidays.
A Reuters/University of Michigan index of consumer sentiment for February dropped to 69.6 in early February from a reading of 78.4 in January. That is the lowest since February 1992, leaving the index at a level that has characterized past recessions.
Consumer spending, an important driver of economic growth, faces headwinds from the decline in home prices and workers’ fears about layoffs, economists say.
And the New York Federal Reserve’s Empire State index tracking general business conditions in the region tumbled nearly 21 points to a negative 11.7 reading, falling below zero for the first time since May 2005.
Well, it just goes to show ya, what a wonderful job the media can do.
Now, people are more frightened of ‘ slow-down, recession, and even worse”, and apparently most of them are taking it to heart.
So its truly not a surprise, or at least it shouldn’t be. Since I’d bet a big proportion of the ‘spending spree” was with credit cards or other means, its truly maybe not a bad thing..
Gloria
Is there no end to these doo-and-gloom articles?
We have so much food that we burn it as fuel in our cars and trucks, we have so many clothes that very few bother to repair them but just buy new (this leaves the “used clothing market” in a very depressed state), and there are vacant appartments and houses everywhere. Why should people suffer amongst so much abundance? I doubt that any will, if they are discovered.
As Jesus demonstrated, wealth is human production. There is plenty of work to be done in this country. We are very wealthy. Fear of want amongst abundance is foolishness.
Don
Wall Street has nothing to fear. All the folks in the US with those high paying factory jobs will bail out the economy with their spending power. It’s a good thing we aren’t a country just full of low paying service sector jobs. I mean, how could we hope for a growth in consumer spending if everyone is stuck making less than $10 an hour? It’s a good thing we remember the lesson of Henry Ford, dean of American capitalism. He discovered that by paying his autoworkers the princely sum of $5 a day (an exorbitant sum at the time and much to the dismay of the rest of the industry), it became possible for them to buy Ford cars. High wages, in the end, produce high profits. Yes, it is good to be in the U.S. labor market.
[End Sarcasm]
My advice to you Wall Street tycoons…turn to India and China for your consumers. That’s where you sent our jobs. Perhaps all those H1b Visa holders you hired domestically, rather than hiring Americans, will help you out with their high waged spending power. Perhaps all the illegal immigrants you under pay will come to the rescue. You might also appeal to the Federal Reserve [again] to bail you out by just printing more dollars out of thin air. After all, what’s the use of a fiat currency if it isn’t flexible? It is just paper, after all. It isn’t as if real gold or silver were on the line.
Enjoy, and remember these two sayings: (1) the love of money is the root of all evil (2) God hates a dishonest scale.