Consumer credit went down 1.5% in May, marking the 4th consecutive decline. Retail sales were down once again, with high end retailer Abercrombie & Fitch facing a 32% decline in sales. Nonetheless, lower end retailers experienced some sales growth. Click here to see WSJ article.
Although deleveraging is good for the American consumer in the long run, the lack of credit availability continues to hurt the retail sector in the short term. As a result of the decline in sales, the sector is likely to continue to generate job losses that may spread to other sectors of the economy that provide goods and services to retailers. Firms currently serving the retail sector, such as those in the technology industry, should shift their marketing efforts to target government spending. Those able to benefit directly or indirectly from the economic stimulus package will be the survivors in the long run.
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
On a more positive note, the Red Sox won against Oakland and the Celtics gave Rasheed Wallace a 3-year deal! Read more about NE sports.
Tags: celtics, Consumer credit, oakland, red sox, retail sales
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
The U.S. economy is still struggling to turn itself around because of poor lending from banks and other creditors. With this slow buying season and horribly boring weather pattern in the Northeast and the drought in some southern areas, retailers and everyone else are struggling to maintain holds on their jobs, cars and other facets of their lives. Essentials are the only goods we can afford all the time right now. A treat is just that and we can rarely afford that. The labor market is suffering as abad as those of us home without jobs. Without climbing retail numbers we cannot afford to let others in to the workforce. We are scared to let go of those precious dollars now. It’s a sad time and a scary one for many individuals and businesses
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
It’s very sad what we see now, but it’s a result of overall economic problems; this is a cause of widespread job losses. It’s like when you see your reflection in the mirror: your reflection is there because you stay in front of the mirror. Job looses take place because of the economy problems; but in this case job looses will not disappear as quickly as our reflection in the mirror, if will be improvements in the economy or “we go away from the mirror” this process will take much longer, like a snowball: nobody acts anymore, but it falls dawn and takes more and more snow or “looses jobs”. For sure, the overall economy is going to be in this recession a little longer than expected.
How we can see, inflation is expected to slow sharply as the economy contracts… Big businesses lost a lot of employees, but the situation is not better with small businesses, I’m not even talking about individuals, horrible situation!!!
It sends more Americans into bankruptcy and force further cutbacks in consumer spending.
The latest jobless report shows the highest unemployment rate the US has seen more than 25 years! I would say it’s an economic stress, tragedy that will continue (at some point) even if the overall economy begins to recover.
Personally, I am scared to think what tomorrow will bring… Everybody now is thinking how to keep what they have already (houses, cars…), mostly don’t even think about buying something like that, or spending money how they did before. All of us are trying to save some money, because you never know who is going to loose their job tomorrow… By numerous measures, this situation is already the worst since the Great Depression, can you even imagine?!
That’s an economic free-fall!
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
From what i can see this economic downturn is in some ways leveling the playing field as the article said the lower end retailers have seen slight increases in sales simply because there prices are cheaper than the prices u will find at the Abercrombie & Fitch and other higher end clothing retailers.
I have worked the the same super market for over five years now and i have noticed out total sales a day are going up and the number of people applying for jobs is outrageous. in case your wondering which super market I’m talking about I’m talking about Market Basket. Not only have sales gone up but they just opened a new store in Chelsea which is the biggest of all the stores and they are also building another store in Gloucester. I’m in awe at how while most other stores are downsizing my company continues to hire more people and build more stores.
Overall I’m sure the unemployment rate will continue to rise at least for another year, but nothing close to what we had during the depression. i wouldn’t be surprised of it reached upwards of 13 or 14 percent before we see improvement. So for now all you can do as someone who is employed is try to be the best at your job so your not the one losing your job, and if you are unemployed you may have to get a job u see as beneath you until the market starts to swing upwards again.
I’m not to worried about it. I have a great seasonal state job with the Dept. of Revenue as a tax examiner. All retail clothing stores are having huge sales right now too, that’s never a bad thing. Clothes are cheaper than ever right now, and I collect unemployment until I start work back up in January. Forget the Sox and Celts, Let’s go Pats!!
The economy really hasn’t effected me that much yet. I am not worried about losing my job because for some reason people still like to go out to eat. I guess it’s a sense of security and makes the problems we are facing a little less hard on people. The problem is that people can’t go out and spend because they don’t have the money. The economy can’t to a quick turn around unless people spend so we are in a tight position right now. Steve does make a good point about the situation in gloucester right now. They are building a mall in gloucester..who needs another mall in gloucester..a) where is the money coming from and b) whose going to go there and spend money when it seems nobody really has much of it at this point? I’m kind of glad in a sense that abercrombie and other stores of that caliber are down sizing because it gives the average person a chance to maybe buy that pair of jeans they want. I’m not saying i love the way our economy is right now, but it seems people are managing to get by and maybe that’s what our country needs, a little wake up call
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
There has been improvement in the retail sector, which I don’t think it will last and there wore more workers filing first-time jobless claims and receiving unemployment benefits. Now, to make money from potential customers, bringing up higher unemployment can lead to high lending and if unemployment increases so will the cost of credit will increase. If we have an easy ability of a credit then consumers can spend.
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
The measures of economic performance in the retail sector seems to me to be the proverbial catch-22. Sales are falling dramatically because the average consumer does not have the expendable income that they used to. At the same time many of these same consumers that are losing their disposable income due to layoffs or paycuts actually work in the retail industry, which means that if consumers are not spending their money at stores the employees of those stores are unable to earn their own income and in turn spend their’s. With the unemployment rate closing in on 9.5% there are less people that have income that can be spent on the type of luxury items that are usually sold via retail stores. Further more those consumers that do still hold down steady employment are going to be less likely to spend their extra income as most may look at the increasing number of the unemployed and guessing that they may be next in line. Unfortunately the best way to stop such an economic downturn is to increase spending and spending is what happens when consumers have disposable income and aren’t worried about when they will get their next paycheck, somethin that for many at this point in time is never a sure thing. To me it seems that the author of this article is correct in making the point that the time has come for the retail industry to look to the government to increase spending and lead them through these difficult financial times, since to rely on consumers that are for the most are cutting back on everything but the necessities is similar to a deathrow inmate waiting for the executioner to lead him to the electric chair, a no win proposition.
For the overall US economy, I think that the measures of the economic performance by the retail sector will continue to suffer as the economy is suffering. Now that people are short with money, they will not be shopping as much as they used to at the stores they would normally spend their money in. On the other hand, if they do choose to shop and spend their money loosely, then they may be looking to shop at cheaper stores.
Working in retail as part of the Abercrombie & Fitch company for three years now, I have seen firsthand the lack of shoppers in comparison to years before. Within the A&F company, there are other brands that branched out including abercrombie (kids) Hollister, Gilly Hicks and Ruehl. Hollister makes 60% of the companies’ profits. Ruehl makes less than 3% of these profits. As a result of this, the 29 Ruehl stores are all being closed in January. Outside of the company the result of the earlier mall hours may be a direct result of the worsening economy. The reason for the amount of sales Hollister brings in could very well be a result of the younger sector of kids shopping at Hollister because the store’s target market is kids between the ages of 12-18. These kids in this age bracket do not have to money conscious as much as others who are much older than they are with additional money worries and their money needing to go elsewhere. The 29 Ruehl stores facing closure in January will definitely leave a lot of people jobless. Those managers who are commonly fresh out of college will be left without a job and may not have anywhere to turn for a while. Those younger part time employees depending on these few hours a week will be left without jobs and will be harder and harder to find any other jobs that may have been easy to find will not have the chance to find them in the struggling economy. As mentioned in the article, companies such as these depend on the back to school season. This season is almost as busy, if not more busy than the Christmas season. Many items that are full price and in season are rarely bought and a bulk of the sales come from the clearance. All in all, I think that the lack of the retail sales will continue decline as the economy is still in the recession. Until then, retail may suffer and will not make as much profit and not bring in as much money and business as times before.
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
With unemployment rising and a decline in discretionary spending, retailers are going to have to pull out all the stops to get consumers to purchase goods for the back-to-school and holiday seasons. Seems like a viscious cycle to me…Consumers are afraid of losing their jobs and therefor the are afraid to spend on anything but the necessities of life. This lack of consumer spending drives the prices down which isn’t a bad thing if you’re looking for a bargain. But with this comes a downturn in the profits of retailers. Less profit will mean that the retailer will eventually have to start laying off employees…these employees, now out of the workforce, will have to drastically reduce their spendng habits. The only answer seems to lie in coming up with a way to reduce the unemployment rate.
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
Honestly, Everyone knows that the economy is really bad right now. I strongly believe that people have to learn how to buget and focuse on the nessasary things until the economy get better.We have to really be wise and know what we are spending our money on.If we dont save up now,now that the economy is really bad we will find ourselfs going through great depression. Therefore, be wise and make the right choice because what ever choice we make today will effect us tomorrow.
What do you think these measures of economic performance by the retail sector mean for the overall US economy; and specifically, the labor market currently facing unemployment of 9.5%?
As a result of banks being carless in their spendings, the U.S is in a state of recession. So the American people are almost forced to budget their money and spending so that individually they dont go bankcrupt. But in order for the economy to look up Americans need to buy more and spend more. (even though i just contradicted myself) What i guess i’m trying to say is that with the help of the government, we as individuals, the economy will fix itself.
The economy will have very slow growth until consumer spending increases. The consumer needs to feel the economy is turning around in order to let go of their precious dollars. Companies selling products have to market sales towards stimulus money entering into very competitive retail market.
The Red Sox’s always slump this time of year, their season usually turns around as past history has shown. The Celtics are building for the future with the Rasheed Wallace deal.
The reason Abercrombie & Fitch are probly doing so badly is because their jeans and the reast of their clothes are so expencive. Also probly because when they have enough employes for some reason they keep hiring new employes and they cut their current employes hours just for the new ones. Another example is last year when i worked on Black Friday there was no one that came into the store for a good two hours. Secondly, they are doing so bad is because they keep opening new stores and they dont have enough to keep them open. those are the reasons i think Abercrombie & Fitch are doing so poorly.
what do you think these measures of economic performance by the retail sector mean for the overall us economy;and specifically the labour market currently facing the unemployment of 9.5%
The reality of things is that the more people have,the more they spend the less they have ,the less they spend.just like the vice president of the national retail federation says”retailers have difficulty selling full price items”and this is due to the fact people have have less to spend cause they dont have jobs but instead they take what is given to them by unemployment to buy the most essentials things they need which is food,gas while they think less of clothes for now cause the resources is not available.Lastly,abecrombie and fitch may not be doing too well cause not only are their prices high but also they do have bad customer services which i consider one of the top qualities to have when you have a business.My main objective is,the more people have the more they spend and the better the economy.