US Consumer Indicators Telling Mixed Story

admin — Sun, 14 Feb 2010 13:40:54 +0000

Remained muted U.S. retail sales rose by unexpectedly fast in January, the government said on Friday, but hopes that consumers will emerge as the driving force behind the economic recovery after a separate survey showed an unexpected drop in consumer sentiment.
With unemployment rate at 9.7% and the housing market in the doldrums, the consumer in the US are not spending as aggressively as they used to do during the previous recessions. The recovery of growth in the last quarter of 2009 was instead due to higher business spending and a strong use of the stocks.
However, the Americans are once again shopping: modest, but at a growing rate. In January, retail sales rose by 0.5%, an improvement over the 0.1% decline recorded in December and 0.3% was expected by most economists.
The recovery in retail trade was lead by sales of electronics, leisure goods and food, slid after the Commerce Department, even as sales of home furnishings and building materials, which have fallen sharply since the collapse of the housing market, falling back more than 1 percent on the month. Without car sales, have increasingly taken the more volatile than government subsidies distort the market, retail sales rose by 0.6 percent, slightly higher than the expectations for a 0.5% increase.
Most economists now expect consumer spending in the first quarter to the 2% in the last quarter of 2009 upwards. At the same time, after big gains over the past two months, consumer sentiment emerged unexpectedly from a two-year high of 74.4 in January to 73.7 in February.
Though the recent decline in stock prices was to assess the decline of public sentiment, consumer sentiment has contributed to current conditions in the context actually increased, while the expectations for the future, that accounted for most of the unexpected decline. Meanwhile, long-term inflation expectations edged down from 2.9% in January to 2.8% this month.
The U.S. economy is facing the big question that whether the consumer all the cash they collect, use as growth resumed increasing personal savings. As alternative, they could spend it on new goods and services, but even with extremely tight credit for consumers think many economists that the Americans will choose the first option, hold and keep that money.

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US Consumer Indicators Telling Mixed Story