Our Changing Globe

Posts Tagged ‘purchases’

Looking at various reports just coming in might send a shiver down your spine.

“The first half of 2009 will be extraordinarily challenging. Some people are giving up eating out; some people are giving up movies; some people are giving up other things like shopping. Those are fundamental changes that will continue”. – Wal-Mart Stores Inc. Chief Executive Officer H. Lee Scott.

Circuit City Stores Inc., which was once the biggest U.S. electronics retailer has said that it will shut down all of its 567 U.S. stores after failing to find a buyer that could keep the chain in operation.

The recession or depression if you prefer to call it that, which began in housing has now spread to households and consumer spending which is the largest part of the economy is believed to have dropped at a 3.5 % pace last quarter after slumping at a 3.8 % rate during the previous three months.

If that’s true then it would be the first time that purchases declined more than 3 % in consecutive quarters since records began in 1947!

GDP (gross domestic product) is believed to have contracted by a 5.5 % annual rate from October through December, which would be the biggest drop since 1982 and final figures will be announced by the Commerce Department on January 30th.

The U.S. lost 2.6 million jobs last year which is the most since 1945 and the unemployment rate climbed to 7.2 % in December which makes it the highest in almost 16 years and it’s causing consumers to lose confidence.

Property values in twenty U.S. cities fell in November at the fastest pace on record and new-home sales most likely dropped by 3 % last month which would make it the lowest level since 1982.

The global slowdown in demand is hurting U.S. manufacturers and the report is also expected to show that orders for durable goods fell in September for a third consecutive month.

Finally, if all of the above isn’t sufficiently horrifying then grab what Brian Bethune who is the director of financial economics at IHS Global Insight in Lexington, Massachusetts had to say …

“The recession entered a more negative and pernicious phase in the fourth quarter and it’s potentially the worst recession that we’ve seen in terms of the severity and the depth”.