U.S. — Yet more data is emerging that consumer spending has begun to slow, potentially leading to the first decline since 1991. This would almost certainly push the entire economy into a recession in the middle of an election year.
A number of retail chains reported lower-than-expected sales in December, and American Express said that starting in early December the growth in the rate of spending by its 52 million cardholders, a generally affluent group of consumers, fell 3 percentage points, from 13% to 10%, the first slowdown since the 2001 recession.
“This is the real deal — consumers are slowing down across the spectrum,” said David Schick, a retail analyst at Stifel Nicolaus. Other analysts are more optimistic, and there are some bright spots now in consumer spending. Sales of sports gear and electronic gadgets — particularly G.P.S. navigation devices and flat-panel television sets — have risen over the last three months.
To Stephen Baker, vice president for industry analysis at the research firm NPD Group, that suggests there is still enough purchasing power for people to buy what they really want. “We probably would not have seen strong sales for electronics products that people really want if the overriding issue was economic,” Baker said.
SOURCE: New York Times