Retailers, consumers and prices
Check out the latest batch of grim data about the U.S. jobs market.
As if the consumer sector wasn’t nervous enough about a sputtering U.S. economy, the number of people filing new claims for unemployment insurance unexpectedly rose in the latest week to its highest level in close to six months.
Labor Department data showed the number of new claims for jobless benefits up 2,000 at 484,000 in the week ended August 7, the second straight increase. Economists polled by Reuters had expected claims to fall to 465,000 from the previously reported 479,000.
The news brings more pain to already angst-ridden retailers, who are hoping to pass on rising input costs to consumers with higher prices as companies try to guard margins in a tepid sales environment.
In July, retailers posted weaker-than-expected sales despite cutting prices to lure back shoppers, suggesting a rough back-to-school season.
The Commerce Department said U.S. consumer spending increased 0.2 percent in February, in line with market expectations, after rising 1 percent in January. That makes two straight months of gains.
However, after adjusting for inflation, consumer spending in February fell 0.2 percent.
Check out how it ain’t getting any better any time soon.
The latest evidence is a new survey by America’s Research Group that showed that nearly a third of U.S. households think it will be a year before their families are better off.
That might not seem like so many, until you see that another quarter think that it will take even longer.
“We’re looking at a retail meltdown much worse than anyone could have imagined six months ago,” said Britt Beemer, founder of America’s Research Group.
Half of the consumers said their shopping budgets were significantly lowered from last year. And almost all of the rest said they were only the same.
More than half also said they had stopped using credit cards for purchases. And 47 percent said they would probably or definitely not buy something if it wasn’t on sale.
So, how’s that stimulus going?
Also in the basket:
Bon-Ton Stores swings to Q4 loss on charges
American Eagle meets Street view
Staples posts weak Q4, says will not give ’09 outlook
Tide, Woolite tout their fashion sense (WSJ)
Wal-Mart plans to market digital health records system (N.Y. Times)
Home Depot said it is gearing up for spring with a wide assortment of lawn equipment and fertilizer products, looking to cash in should consumers cancel their contracts with professional landscaping companies.
What’s one way to get reluctant shoppers back into the stores? Give them a sales tax holiday — or two or three.
That’s what the National Retail Federation is urging the government to consider as part of the economic stimulus plan being debated in Washington.
The terrible U.S. retail sales racked up in December -- called a "horror show" by ING -- were all the more gruesome because of the sales on offer to customers in the run up to Christmas. Shops weren't exactly giving things away, but their generosity knew few bounds.
Consider the experience of one visitor to a heaving handbag department in a Maryland Macy's.
Customer: "I would like to buy this handbag please. Oh dear, it appears to be the only one that is not on sale."
Salesman: "So it is. Tell you what, sir, I'll give you 15 percent off anyway."
Check Out mixed news on the retail sales front.
The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.
Check Out unemployment’s strain on consumers’ wallets.
The U.S. Commerce Department said consumer spending contracted 0.6 percent in November, the fifth-straight monthly fall. Incomes shrank 0.2 percent. A separate report showed initial claims for jobless benefits last week reached the highest level in 26 years.
The recession, corporate cutbacks and lower demand for big-ticket items are not stopping LG Electronics from expanding its U.S. appliance business.
The Commerce Department said total retail sales fell 1.8 percent in November to a seasonally adjusted $355.66 billion following a revised 2.9 percent plunge in October.
Excluding motor vehicles and parts, sales were down 1.6 percent in November after a revised 2.4 percent October fall.