Where is the economy headed? Guess!

This week we had Retail Sales reported as I mentioned in the previous post, but I didn't spend much time discussing it and looking at the recent trend. Before I get into the data, I thought I would comment on why Retail Sales are an important metric to determine where the economy is headed.

The reason is because the Consumer represents 70% of our economy and when they are spending the economy is growing and when they slow the pace of spending, the economy can grind to a halt. It has been said many, many times, the economy has been sustaining "moderate" growth. Several posts ago I said when you see the word "moderate", substitute "slow" growth. So looking at Retail Sales trends give us a sense of the Consumer and the economy. Let's look at the recent trend.

Retail Sales for February was 1.3%
Retail Sales for March was 0.9%
Retail Sales for April (reported yesterday) was 0.5%

Do you spot a trend?

One other piece of data, which I like to look at is Consumer Debt and specifically Revolving Credit from Credit cards. Here is the data starting in 2010.
Q1 2010 840.1
Q2 2010 826.2
Q3 2010 806.9
Q4 2010 800.7
Q1 2010 796.1

Do you spot a trend?

The Consumer is trying to pay down debt it seems and is spending less on Retail Sales. And while prices of Gasoline have increased significantly, the Consumer continues to feel the pain.

So when Fed. Chairman Bernanke says we are in a "moderate recovery", you may be hearing soon that the economy has "stalled", which is another word for going nowhere!

Three days this past week the Dow was up and only 2 days down, but the Dow finished the week down for the entire week.

I'm back!

Hi everyone. I am sorry I haven't posted anything this past 10 days as I was back east and was busy with family. I will resume my posting on a more regular basis. Thanks for your visit.

This morning CNBC had the head of VISA on their show talking about their new Digital Wallet which will make charging easier and the use of the actual Credit Card to fade over time in favor of the digital phone embedded chips or software. However, that was not what caught the most of my attention. When Mark Haines asked him his view on the Consumer and the economy he said, we are still in a slow recovery, with the emphasis on the word "slow". Then he elaborated on what he meant. He said that while the economy has not lost ground but it is barely advancing. So when you hear from Bernanke say we have "moderate" growth, substitute the words, "slow to non existent!" That was the most accurate pronouncement I have heard to date in describing this stagnation.

You can try and blame the President but if you miss blaming the Republicans, you have your head in the sand. They have tried to stop this President at every turn. They want to cut spending drastically, but not invest in anything that would create real stimulus and jobs. That's the jam we are currently in. Heck, many didn't even give any praise to our President for getting Bin Laden. But enough on that for now. It's good to be back!