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Retail Sales and the Economy

Retail Sales and the Economy

Everyone is watching the housing market and the rest of the economy for that matter. Americans are fighting to keep their homes and to put food on the table. People are also spending a lot of money at the pump. So, how have retail sales done so far?

Not good. In September, retail sales experienced the biggest drop in over two years. This proves that Americans, in general, are worried about our economy. People aren’t going to the mall as often and are certainly not spending a lot (if any) money there. It isn’t surprising either to note that auto sales have taken a serious plummet.

The U.S. Commerce Department reported that retail sales decreased 1.2 percent in September. The expected drop was only 0.7 percent. This means that retail sales decreased by double the amount that was predicted. This drop proves that our country is in a recession.

This recent data tells a lot about consumer spending. Consumer spending accounts for two-thirds of all economic activity. Thus, such a large drop proves that Americans are starting to buckle down and not spend as much, or even not put as much as they used to on their credit cards.

The auto industry is also suffering big losses. Auto sales decreased to below 1 million units. Most people have decided to keep the old car instead of getting a new one. Those people who are looking for a new car are struggling to get financing.

The United States economic crisis is starting to affect everyone. The significant drop in retail sales shows that consumers aren’t as concerned with buying unnecessary products and services. Rather, people are struggling to make ends meet, especially with the thousands of job layoffs that are happening every day. No one knows when this financial crisis will end. No one knows exactly how bad things will get. No one knows if the government’s bailout plan will actually work. No one knows the future state of our crippled economy.