July retail sales

The report that July retail sales fell 5.1% has a number of economists doubting that the economy is poised for a recovery any time soon. After all, consumer spending accounts for 70% of the economic growth in this country. While there are positive signs that the recession has bottomed out, improved consumer spending is what will lead this economy back.

However, before we discount the consumer and paint a doomed economic future, lets see what the next two months bring. While the impact of job losses and housing woes have clearly influenced the spending patterns of todays consumers, the retailers have also contributed through their deep discounting approach. Earlier this year, deep discounts on many items were the norm. Retailers have trained the consumer to be on the lookout for the next big deal. Even consumers with money to spend have become more discount focused. As for the next two months, I believe you will see spending pick up as consumers realize that the real deep discounts are gone. I also believe you will see consumer-spending pick up especially in teen apparel as one of the greatest economic growth drivers kicks into full gear….Peer pressure. Lets hope we can count on this!