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Consumers worried about jobs put a tight grip on their cash and trimmed spending by 0.1 percent in April, the biggest cutback since the beginning of the year.The dip in spending represented a big pullback by consumers from March, when they ratcheted up spending by 0.8 percent, the Commerce Department reported Friday.
April's spending figure was weaker than economists were expecting. They were forecasting a tiny rise of 0.1 percent
What good does it have to have money to invest if no one is buying anything? Why would you produce more inventory, when we haven't worked through the inventory left over form the bubble, and when no one wants to buy anything?
Do you usually get worked up about changes in monthly trends? Did you get ecstatic when the BEA announced and upward revision to GDP? Are you happy that the rate of increase in unemployment has practically flattened out?
Yeah this is not good, but a little perspective please.
Posted by: SteveSteve perspective is what makes this not good. If you have been paying attention, you know that consumer spending has been the one strong bright spot in the economy. The combination of the persitant unemployment, the potential for a slow down in a housing related spending (rates don't have very much lower to go), the persistant weakness in the manufacturing sector all combine to make a worse than predicted report troublesome. If any of the other problems did not exist, it would just be a blip. Taken in combination with all of the other problems, it is worrisome, and deserves more attention that it would normally would.
Posted by: kevinAnd a one month change is nothing to get your panties in a knot over. Personal consumption declined from Dec. 2002 to Jan. 2003. Did you get your panties in a knot then? It also declined between Aug. of 2002 and Sep. 2002. Were you worried then about consumer expenditures?
Get a grip, the world is not ending...yet. You might be right, but basing all of this on just a one month change in the data is hardly something to get all panicky about.
See the problem is you focus on one thing that looks bad and ignore the others that actually turn out better or suggest we might be finally coming to the end of the recession.
Posted by: SteveNo, the problem is that you equate concern with the trends and concern with the ineefctivness of the economic plans of the Bush Administration with panic. Blind optimism is not any better than blind panic, you know :)
Posted by: kevin
