June is just about other and it's becoming increasingly clear that the consumer has run out of steam. After a nice run earlier in the year, retail sales have begun to soften in recent months and figures so far in June make it look like same-store sales might even decline for the month.
It seems pent-up demand can only fuel spending for so long. What we really need is jobs, jobs, jobs. And those aren't materializing at anywhere near the rate necessary to make consumer confidence is crashing as well.feel comfortable enough to open their wallets. In addition, consumers--rightly--are deleveraging. And unsurprisingly,
In part, this is because consumers in many countries have become more frugal in response to the recession and the decline in house prices. In America houses turned into cash machines during the credit boom as people remortgaged to release equity and boost their spending. Mortgage equity withdrawal rose from less than $20 billion a quarter in 1997 to more than $140 billion in some quarters of 2005 and 2006. After 2007 it slowed abruptly and even went negative (homeowners paid down debt) in 2009. Consumers are also more cautious about borrowing in view of sluggish wage growth and rising unemployment in most of the developed world.
It's been a while since we did a roundup of links. Here are some other key stories from recent days that are worth checking out.