CONSUMER SPENDING STALLS – AT 10:51 A.M. ET: In another sign that the economy is weakening, jnot strengthening, consumer spending has sputtered. From Bloomberg:
Consumer spending stalled in May as stagnant wages and slackening employment held back the biggest part of the U.S. economy.
Purchases were little changed after a 0.1 percent rise the prior month that was smaller than initially reported, according to Commerce Department figures issued today in Washington. Another report showed household sentiment dropped this month to the lowest level of the year.
A lack of jobs may prompt Americans to keep focusing on replenishing depleted nest eggs, hurting sales at retailers from CarMax Inc. (KMX) to Red Robin Gourmet Burgers Inc. (RRGB) Economists at Goldman Sachs Group Inc. and Morgan Stanley were among those cutting forecasts after the figures, indicating the economy slowed further in the second quarter.
The data are “consistent with a weakening growth backdrop,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “There’s still this propensity for consumers to boost their rate of savings, which is what you’d expect in an environment where they are very skeptical about the outlook for the labor market.”
COMMENT: Not good news for the White House, but we point out, as noted in our first post this morning, that President Obama's numbers have actually improved recently.
There are only four monthly reports to go before the election, not much time for the economy to move forward.
June 30, 2012