Consumer Spending - Retrenchment

Economics - Consumption

Consumption - Americans claim to be less interested in spending than at any time in last 4 decades (credit crisis, recession); will low prices still draw consumers? (Black Friday - from red ink of losses for year into black ink of profitability for retailers); 3Q 2008 - Commerce Department reported personal consumption spending, adjusted for inflation, fell at 2.7% annual rate, (biggest decline since 2Q 1980 which was helped by tax rebates from stimulus package); economy contracted 0.5%; Conference Board reported 1.9% of respondents (to its 40-year monthly survey of major-items purchase plans for next 6-months) planned to buy a house (lowest since 1982, double-digit interest rates - see below), 3.7% planned to buy a car (lowest in 40 years vs. previous low of 4.5%), 1.3% planned to buy a new car (lowest in 40 years), 8.8% think jobs are easy to find (lowest in 15 years).

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