“American consumers aren’t what they used to be – and that helps explain the plodding economic recovery,” notes The Washington Post.  “It gets no respect despite creating 14 million jobs and lasting almost seven years.  The great gripe is that economic growth has been held to about 2 percent a year, well below historical standards.”

Forget higher costs of living, education, healthcare, and inflation as the core reasons why Americans have sent the U.S. savings rate to 5.4% from 4.8% year over year.  It’s our fault the economy is not improving.  If we only spent more money, the economy wouldn’t look as weak as it is.

Millions of people have fallen off the U.S. participation rate.  Unemployment is closer to 9.9%, per the U6 than the headline unemployment rate of 5%.  The only reason we have a print of 5% is because 362,000 Americans just fell off the labor force. Americans feel safer saving money than spending it these days out of fear they, too, could lose their jobs, their earnings, their savings. 

Retailers are suffering because of the economic realities.  The inventory to sales ratio for example is now back to where it was during the last recession.  That tells us there’s more unsold inventory just sitting around.  That’s a sign of an unhealthy economy.  Macy’s for example just cut its outlook on an “uncertain consumer” as inventories reach record highs.  Same-store sales fell 6.1% nearly doubling expectations.  Sales fell 7.4% in Q1 2016. 

Challenger, Gray & Christmas, U.S. companiesAnd, according to Challenger, Gray & Christmas, U.S. companies announced 35% more jobs cuts in April month over month.  We’re up 24% year over year.  Yet, consumers are blamed for the economic chaos. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Post comment