Post by jeffolie on Oct 9, 2007 12:42:47 GMT -6
US retail sales slowed down in September and early October based on weekly data provided by the International Council of Shopping Centers and UBS Securities as well as by Redbook Research.
Same store sales grew only 2% in September relative to a year ago (i.e. they fell in real terms). Sales grew only 0.3% in September relative to August; and sales in the first week of October were flat relative to the previous week.
This slowdown in consumption is not surprising as the saving-less and debt burdened US consumers is now on the ropes and at a tipping point. Headwinds against consumption include sharply falling home prices and home values (now falling at a 9% annual rate based on the Case-Shiller/S&P index), sharply falling home equity withdrawal (now down to about $140 billion at annual rate from its $700 billion peak in 2005), a credit crunch in the mortgage markets that is now slowly spreading to other types of consumer credit, a falling consumer confidence, high oil and gasoline prices (with oil hovering around $80), concerns about the financial turmoil and volatility and a slowing and slackening labor market where – in spite of still positive job creation – the rate of job growth is slowing down and many other indicators of the job market signal a slackening of this market.
With consumption being 72%, with residential investment still falling at a 15-20% rate in Q3 and with capex spending by the corporate sector being flat in Q3 (after two months of falling durable goods orders) and the credit crunch in financial markets still serious in spire of a modest and tentative mending of the liquidity crunch, the most likely outlook for the US economy is still one of a hard landing.
www.rgemonitor.com/blog/roubini/
With the economy slowing and stalling, the DJIA continues to hit new highs almost daily. This is fascinating. Bad economic news is good news for the stock market as the investors smell more rate cuts.
Same store sales grew only 2% in September relative to a year ago (i.e. they fell in real terms). Sales grew only 0.3% in September relative to August; and sales in the first week of October were flat relative to the previous week.
This slowdown in consumption is not surprising as the saving-less and debt burdened US consumers is now on the ropes and at a tipping point. Headwinds against consumption include sharply falling home prices and home values (now falling at a 9% annual rate based on the Case-Shiller/S&P index), sharply falling home equity withdrawal (now down to about $140 billion at annual rate from its $700 billion peak in 2005), a credit crunch in the mortgage markets that is now slowly spreading to other types of consumer credit, a falling consumer confidence, high oil and gasoline prices (with oil hovering around $80), concerns about the financial turmoil and volatility and a slowing and slackening labor market where – in spite of still positive job creation – the rate of job growth is slowing down and many other indicators of the job market signal a slackening of this market.
With consumption being 72%, with residential investment still falling at a 15-20% rate in Q3 and with capex spending by the corporate sector being flat in Q3 (after two months of falling durable goods orders) and the credit crunch in financial markets still serious in spire of a modest and tentative mending of the liquidity crunch, the most likely outlook for the US economy is still one of a hard landing.
www.rgemonitor.com/blog/roubini/
With the economy slowing and stalling, the DJIA continues to hit new highs almost daily. This is fascinating. Bad economic news is good news for the stock market as the investors smell more rate cuts.