To paraphrase Mark Twain, the report of the American consumers' death has been greatly exaggerated.
As evidenced by Wednesday's retail sales report for the month of January, which showed a gain of 0.3%, we're all out there spending like usual despite the high price of gasoline, the credit crunch and the fear of recession. Given that consumer spending accounts for more than 70% of GDP growth, the data were a strong sign that maybe, just maybe, all this recession talk is much ado about nothing.
Now I don't want to put too much stock into one piece of data, especially given that the month of January now benefits from all the gift cards given at the holidays. Spending that used to be recorded in December now gets registered in January (or later when the cards are used). Nevertheless, the data seem to suggest that even under the stress of current economic conditions, consumers will fork over their money for a new shirt, a pair of pants or yet another product from Apple.
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