One of the issues I often teach is how house prices affect consumer spending and economic growth. The logic is:House prices are the biggest form of consumer wealth in UK and US.A rise in wealth causes rising spending because:Increased wealth increases consumer confidence.Higher house prices enables you to remortgage against the value of your house and spend the equity released.Similarly, a fall in
According to the Commerce Department, consumer spending rose by 0.4 percent in May the highest in nine months as consumers spent stimulus checks. At the same time personal incomes rose by 1.9 percent and the savings rate increased by 5 percent, the highest amount since March 1995.
According to Pet Age magazine, total pet spending was 41.2 billion dollars in 2007 up from 38.4 billion in 2006. The American Pet Products Manufacturers (APPMA) predicts a 5.6 percent increase over 2007 spending for 2008 resulting in a prediction of $43.4 billion.
Attributing to this grow is a combination of things including:
More baby boomer’s [...]
On Tuesday, the Commerce Department releases its April data on new home sales, expected to show a decline from March sales, according to economists surveyed Friday by Thomson Financial/IFR. Also Tuesday, the Conference Board’s consumer confidence index for May is anticipated to edge lower, too.
Wednesday, the Commerce Department reports on orders for durable goods, which [...]
Yes definitely, but based on this statistic I don't know if we are buying more while spending more or buying less while spending more. My point was that if we are buying less but spending more because of inflation, then the consumer spending statistic is being used to make us believe that the economy is doing better when it really isn't.
Overview:
Retail sales for February disappointed with a total decline of 0.6% m/m. Although much of the weakness was driven by non-core components, there was further evidence that real consumer...
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"How many people would continue recycling at home if they had to pay for it to be collected? The reality is that there would be a massive fall-off in numbers. Deep down most consumers' green efforts would come to a swift end if there was a cost attached, or it became inconvenient." -- Glynn Davis
by Glynn Davis
Baltimore – (TFN): Pick up a paper… Read more »
China's retail sales figures for January and February were up 20.2 percent compared to the same period a year prior. The surge is due to a combination of the rising middle class and the 11th straight year of high inflation. In February alone, inflation rose 8.7 percent due to rising food costs. The sales growth was highest for the country since 1999.
Crude oil rose more than $2 a barrel in New York after a U.S. government report showed consumer spending gained the most in more than two years, signaling economic growth and oil demand may be stronger than expected.``Energy prices got a shot in the arm when consumer spending showed a much brisker pace that what people were looking for,'' said James Cordier, founder of Liberty Trading Group's OptionSellers.com in Tampa. ``That would add strength to the idea that demand could still be strong.''READ MORE... The Commerce Department report comes as oil heads for its biggest annual gain in five years. The 1.1 percent jump in consumer sales last month may reduce the possibility that the economy will contract this quarter. Oil has fallen 6 percent from a record $99.29 on Nov. 21, on concern demand may decline as economic growth slowed.Crude oil for February delivery rose $2.25, or 2.5 percent, to settle at $93.31 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest clos
Crude oil rose more than $2 a barrel in New York after a U.S. government report showed consumer spending gained the most in more than two years, signaling economic growth and oil demand may be stronger than expected.``Energy prices got a shot in the arm when consumer spending showed a much brisker pace that what people were looking for,'' said James Cordier, founder of Liberty Trading Group's OptionSellers.com in Tampa. ``That would add strength to the idea that demand could still be strong.''READ MORE... The Commerce Department report comes as oil heads for its biggest annual gain in five years. The 1.1 percent jump in consumer sales last month may reduce the possibility that the economy will contract this quarter. Oil has fallen 6 percent from a record $99.29 on Nov. 21, on concern demand may decline as economic growth slowed.Crude oil for February delivery rose $2.25, or 2.5 percent, to settle at $93.31 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest clos
Consumer spending is closely watched because it accounts for two-thirds of total economic activity. Consumers put aside worries about slumping home sales and soaring gasoline prices and headed to the malls in November, pushing spending up by the largest amount in 3 1/2 years. Consumer spending surged by 1.1% last month, nearly triple the October gain. (That in my opinion is a bogus comparison. Obviously with holiday season November sales will be better than October)The gain reflected various promotional efforts by retailers such as heavy discounting and longer store hours at the start of the holiday shopping season. (That means smaller profits for retailers. More the reason to stay away from retail stocks.)Incomes were also up last month, rising by 0.4%, double the October increase but slightly below the advance that had been expected. (Income rising is a good thing. Finally something to cheer about.)An inflation gauge tied to spending showed a 0.6% increase in November, the biggest ju
Consumers put aside worries about slumping home sales and soaring gasoline prices and headed to the malls in November, pushing spending up by the largest amount in 3 1/2 years.
The Commerce Department reported Friday that consumer spending surged by 1.1 percent last month, nearly triple the October gain. The gain reflected various promotional efforts by retailers such as heavy discounting and longer store hours at the start of the holiday shopping season.
Consumer spending is closely watched because it accounts for two-thirds of total ec
CHICAGO, Aug. 9 /PRNewswire/ — “Financial markets endured quite a roller coaster ride in recent weeks, as the gap between perceived and actual credit risks converged. The ongoing meltdown in the risky end of the mortgage market tested the limits of existing credit risk models, which are better suited to estimate the risks of traditional credit portfolios than the more exotic products attached to Subprime Mortgage Industry and Alt A Mortgage Market, which require less documentation,” says Diane Swonk, chief economist of Mesirow Financial, in her August issue of Themes on the Economy available at http://www.mesirowfinancial.com/pdfs/newsletters/themes/themes_0807.pdf.
“The repricing of subprime ARMs (adjustable-rate mortgages) were especially problematic as it stressed the balance sheets of previously solvent borrowers. Defaults surged, foreclosures skyrocketed and the value of those inventories plummeted, as lenders were forced to auction off hundreds of homes a
Consumer spending rose at the slowest rate in five months in March while construction activity managed only a tiny gain, weighed down by further weakness in housing.
The Commerce Department reported...
GDP - No Surprise, IF... by Jim Kingsland - 4/27/07 snip:... No surprise GDP would be weaker than expected at a 1.3% annual pace if you've been reading Nouriel Roubini, or John Williams. If you've only been looking at conventional soft landing views then with all due respect you are driving with the blinders on. But it's not all about waning growth. We're all going to be having a 'Stag' party, as in Stag-flation if the data keeps coming in as it has been... GDP Growth Update by The Street Light - 4/27/07 snip:The thing that worries me the most is how personal consumption is now virtually the only thing keeping this economy going. But this may not be sustainable, given continued weak income growth and the end of the real-estate ATM that millions of individuals had used to bolster their consumption in recent years. If consumption growth starts to follow income growth, the US economy could be in for some serious trouble... Ford says April sales 'terrible' across industry by Reuter
The outlook for consumer spending turned hazy Thursday as warnings of weak sales ahead overshadowed better-than-expected March sales at many of the nation's big retailers.
Analysts said rising...
From Yaser Anwar, CSC of Equity Investment IdeasAs usual the Monday edition is long, but I promise to add value to your investment outlook. Thank you in advance for your time and patience.HOUSING, GDP & CONSUMER SPENDINGFears that the US housing market crash will deflate global economic growth and commodity markets have grown in recent months. Housing starts have plunged, unsold housing inventories have piled up, and prices have had severe declines. Given that home equity withdrawals have financed a huge portion of US consumer spending growth in recent years, a housing market crash has the potential to eat away at the GDP, which it has done.The GDP came in at the lower level, 1.6%, well below expectations. The culprit of this low number was a 17+% drop in residential investment spending. Housing alone took 1.1% off GDP growth. Net exports subtracted 0.6% from growth in the 2nd Q.With the Big 3 automotive production plans looking lean for 4th Q, this could lead to substantial build up i
