Squeezed by economic woes, Americans spending less
US: The housing downturn, a lack of once easy credit and
rocketing gasoline prices sapped Americans' wallets and purses last
month as retailers across the country reported lower sales Thursday.
A monthly survey by the International Council of Shopping Centers (ICSC)
showed that comparable US chain store sales slumped 0.5 percent in March
compared with the same month a year ago.
The consumer pullback marked the weakest monthly sales reading in 13
years and economists said it showed Americans are cutting back their
spending amid fears the economy could be falling into a recession.
"US consumers, up until recently the most powerful force on planet
Earth, are in retreat," Joseph Quinlan, a chief market strategist for
Bank of America, wrote in a research note.
"Staples are in, luxury items are out. Small cars are back. Demand
for steaks has declined - think ground beef."
An increasing number of economists believe the world's largest
economy will endure a recession during the first half of this year,
especially if the legendary American consumer cuts back on shopping
trips to the mall.
Falling home values and higher gasoline prices are forcing many
consumers to become more budget conscious while a credit crunch has made
it harder for Americans to get bargain-rate loans from cash starved
banks.
The housing slump has sparked credit difficulties for some of
America's biggest banks and economists fear many consumers are
struggling to remain on their feet amid harder economic times.
Consumer spending is a vital motor for the US economy because it
accounts for around two-thirds of all economic activity.
Michael Niemira, ICSC's chief economist, said the latest retail sales
snapshot shows consumers are concerned about the economy.
"Looking forward to April, record high gasoline prices and consumers'
worry about the economy will continue to curb discretionary spending
power," Niemira predicted.
He said an earlier than usual Easter holiday cut into the number of
shopping days last month, but that "weakness" spanned clothing shops,
department stores and even hit luxury retailers.
Friday, AFP |
