Retail Therapy? Americans Spend More but Feel Worse
My first boss once said to me: "Watch what they do and ignore what they say." He was referring to consumers, who despite telling pollsters that they feel rotten about the economy, spent more money than expected at the nation's retailers last month.
Retail sales rose 1.1 percent, the largest gain in seven months, propelled by auto sales, which were up 3.6 percent. Without cars, sales increased 0.6 percent, double analysts' forecasts. The gains occurred across a number of categories -furniture, gasoline, electronics and spending at restaurants and bars all contributed.
How can we make this data jibe with the second data point of the day, consumer sentiment? The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment dropped to 57.5 in October from 59.4 in September. More sobering was consumers' expectations, which tumbled to 47, down more than 20 points since the beginning of the year and the lowest level since May 1980.
If people feel as bad as they have felt in thirty years, why are they shopping? Because although we all are a bit freaked out by events in Europe and the slowing global economy, when it gets down to the day-to-day stuff, we somehow drown out those worries and get on with our lives.
That is, of course, if you are lucky enough to have a job. The 25 million Americans, who are unemployed or under-employed, don't have the luxury to leave their worries on the doorstep and head to the sunny side of the street. (For those too young to remember, "On the Sunny Side of the Street" was a 1930 song composed by Jimmy McHugh with lyrics by Dorothy Fields.) But some are headed to the streets in another way - through the Occupy Wall Street marches occurring across the globe.
When I wrote about OWS earlier this week, here are some of the comments I received:
- "Is no one responsible for their own well being anymore? Everyone wants to find someone else to blame?"
- "They aren't mad. They just resent the fact they aren't rich, but of course, they aren't doing anything to earn their way."
- "Pointing fingers is not going to solve anything, as Congress and this President have proven over and over."
Perhaps if more people felt like they had a chance, they wouldn't feel so desperate and would not be seeking a repository for their financial anxieties. Before dismissing these protests, its worth understanding that stark economic realities provide the underpinnings to the Occupy Wall St protests.
Photo by Flickr User turtlemom4bacon, CC 2.0