Our Changing Globe

Archive for the ‘retail sales’ Category

Facts For Working People: 'Free markets' and global wealth

weknowwhatsup.blogspot.com2/28/12

In a new paper, Ricardo and Robert Fernholz have updated research on the distribution of global household wealth (Wealth distribution without redistribution, 27 February 2012, www.voxeu.org). I have reported on this in …

Daily Kos: Fed: Household wealth plummets 23% in two years

www.dailykos.com3/26/11

NEW YORK (CNNMoney) — The average American family's household net worth declined 23% between 2007 and 2009, the Federal Reserve said Thursday. A rare survey of U.S. households, first performed in 2007 but …

According to the Federal Reserve’s Flow of Funds report today, net worth for households and non-profit groups decreased from $51.7 trillion in the fourth quarter to $50.4 trillion, which is the lowest level since 2004.

U.S. household wealth fell in the first quarter by $1.3 trillion, extending the biggest slump on record, as home and stock prices dropped.

Real-estate-related household assets decreased by $551.1 billion, which follows a $974.5 billion decrease in the fourth quarter, and mortgage borrowing was unchanged from January through March.

As wealth evaporated, Americans cut back on spending, and saved more, thereby blunting the effect of the tax breaks and income supplements provided by administration’s stimulus plan.

Retail sales did rise in May for the first time in three months, but the increase was solely due to people returning to automobile showrooms looking for bargains.

The economy contracted at a 5.7% annual rate in the first quarter, and consumer spending rose by 1.5%.

A just released report by the Commerce Department shows that retail sales unexpectedly dropped by 0.4% in April, following a revised drop of 1.3% in March and analysts contributed the drop to the biggest loss of household wealth on record, falling home values and rising unemployment.

Most economists had predicted that retail sales would rise by 0.2% after a 1% decrease a month earlier.

Bill Cheney, who is the chief economist at John Hancock Financial Services Inc. said in an interview that, “The second quarter is going to be tough. Consumers are losing their jobs, concerned about losing their jobs and losing wealth”.

Mike Niemira who is the chief economist at ICSC was a little bit less downbeat and said, “We’re still working our way through the slowdown. I think it will get better as the year progresses. The month of May will still be tough and I suspect by the summer that things will be a little broader in terms of the improvement”.

The decline in sales was led by falling demand at furniture, clothing, grocery and electronics’ stores, and even as fuel prices rose, receipts at service stations fell, indicating perhaps that Americans were driving less.

Clothing sales fell by 0.5% and sales at general-merchandise stores fell by 0.1%.

Auto sales unexpectedly gained by 0.2% after dropping by 2% in March, with automobiles selling at a 9.3 million annual pace in April, compared with a 9.9 million rate in March.

Chrysler, whose U.S. whose sales were down by 48% from the same month last year, started offering rebates of up to $6,000 on May 6 and the offers will continue until the end of the month.

The Labor Department reported last week that payrolls fell by 539,000 workers last month making it the smallest drop since October, but it took the unemployment rate to 8.9%, which is the highest level since 1983 and economists expect it to average 9.6% in 2010.