Health of the U.S. consumer is failing

TEXT OF STORY

Doug Krizner: For the markets today, a report from the Federal Reserve on the health of the consumer. Paul Brandus has a preview.

Paul Brandus: The death of the American consumer has been proclaimed countless times. Yet through good times and bad, folks have always kept on spending.

But now, with oil prices at record levels and the housing market heading south, the prognosis for consumer spending isn’t good:

Joshua Shapiro: It is deteriorating. And I think it will be deteriorating at an increasing pace as we get closer to the holiday season.

Joshua Shapiro is chief economist at Maria Fiorini Ramirez in New York. He says the data he’s looking at indicates consumers now are more interested in getting out of debt than adding more red ink.

Shapiro: The housing bubble pushed home prices to ridiculous levels. Now with home prices heading south fairly quickly, that game is over and I think the consumers will be really trying to get balance sheets on much sounder footing.

The Fed Report due today gives September credit figures. Shapiro says no matter what that shows, things have gotten worse since then.

I’m Paul Brandus for Marketplace.