Consumers Keeping Their Money Close
Although they do not advise the consumer of where to buy gold coins, the super-store Wal-Mart, is viewed as an economic predictor for many households, where they shop for groceries, home supplies and gasoline. Wage gains, which are slim to none, and a disappointing recovery hinder consumer buying in America and Europe, at the same time they get in the way of growth in many companies and keep the struggling middle class from spending as much as they used to.
According to Wal-Mart CFO Charles Holley: “The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending.â€
“The key issue here then, we have to assume that back-to-school is not off to a good start,†says David Strasser analyst for Janney Montgomery Scott.
Shocking as it may sound, the indication from Wal-Mart’s numbers appears to run counter from the governments take on retail spending, but as Strasser observes, it’s just one of many indicators that reveal a different view of the American shoppers psyche.
A survey made available on Friday showed that U.S. consumers, in anticipation of higher interest rates and seeing reluctant economic growth, were a less confident in August as attitudes fell from last month’s six-year high.
The Thomson Reuters/University of Michigan’s initial take on the overall index on consumer health dropped to 80.0 from 85.1 in July, the highest since July 2007.
Long-term interest rates have jumped by more than a full percentage point over the last three months on the view that perhaps as soon as next month, tapering by the Federal Reserve will start and reduce its substantial assistance for the economy.
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