Consumers are feeling pressured by higher gasoline prices and a sluggish housing market, particularly low and middle income consumers," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass.With a negative savings rate and consumer debt at an all time high, most families simply do not have the ability to keep spending at their present rate. Consumer spending accounts for two-thirds of the economy and if that spending keeps slowing there is a very real chance that the U.S. economy will slip into recession.
Analysts had already expected last month to be weak after an early Easter motivated many consumers to do their holiday shopping in March, siphoning away part of April's business. But sales were much softer than expected, raising concerns that retailers will also see disappointing results in the months ahead.
Thursday, May 10, 2007
Retail Sales Weak in April
Retailers, including Wal-Mart, posted weak sales in April. The results were worse than forecast and show the pressures on middle and lower class Americans. With gas prices rising daily and a housing market on the verge of collapse, consumers stopped spending.