Could this be the year shopping died?
Even in a downtrodden economy, we could always count on a constant rise in consumer spending every year, if only a slight one. But retailers predict this year, Americans will actually consume less. Steve Henn reports.
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Scott Jagow: Now, on consumer spending. For the last three decades at least, you could count on retail spending going up year after year. It happened every single year. But a forecast out this morning says this could be the year the shopping died. More now from Marketplace’s Steve Henn.
Steve Henn: The National Retail Federation forecasts retail sales will fall by half a percent this year. Here’s the group’s Ellen Davis:
Ellen Davis: The National Retail Federation has never forecast negative growth.
Until now. Davis says there are lots of reason consumers are snapping their wallets shut. Declining home values, a depressed stock market. But the biggest is the trouble in job market. In the last few days, there have been thousands of new layoffs, and the unemployment rate is expected to climb above 8 percent.
As dismal as these projections are, Davis says they could be worse.
Davis: If an economic stimulus package is not passed, all bets are off.
She says the forecast assumes congress will pass President Obama’s massive stimulus plan, and that by the end of this year the economy will be growing again. Or at least that’s what retailers are counting on.
In Washington, I’m Steve Henn for Marketplace.