Page 7 - Aruba Today
P. 7
U.S. NEWS A7
Friday 8 April 2016
US Financial Front:
Stalled consumer spending in 2016 gives retailers more pain
JOYCE M. ROSENBERG Randal Weeks, owner of Gray Living poses for a photo at his retail store in McKinney, Texas. Cus- running up credit card bills,
AP Business Writer tomers’ reluctance to spend has sent Weeks’ sales down 12 percent so far this year from the same Phibbs says.
NEW YORK (AP) — Shop- period of 2015. The problem goes beyond the Dallas area, Weeks also has a wholesale business, “Retailers love to think
pers at Randal Weeks’ supplying merchandise to other retailers around the country, and they report their customers are there’s going to be this
home decor have start- hesitant too. great catch-up moment,
ed being more tentative when we’re all going to go
about buying the pillows, (AP Photo/LM Otero) back,” Phibbs says. “The
furniture and framed prints reality is, this is the new nor-
they admire in the store. of The Retail Doctor, a con- a sense of how it will turn when spending rose about mal.”
They even shy away from sulting company based in out. The pace of consumer 6 percent or more. Erin Sandler feels the im-
small, inexpensive items Coxsackie, New York. And spending so far this year is But shopping doesn’t have pact of consumers’ cau-
like candles. Gray Living’s Weeks says a sharply lower than the 3.4 the appeal for many peo- tion. Her clothing and gift
“We are seeing much less few of his customers have percent for all of the last ple that it did before the shop, Quinstance, had
impulse buying and hear- said they’re uneasy be- presidential election year, recession, especially since a strong holiday season,
ing more ‘I need to go cause of the presidential 2012, as well as the election consumers have become but business slumped when
home and think about it,’” election; they don’t have years before the recession, more conservative about fewer shoppers came to
says Weeks, owner of Gray the store starting in Janu-
Living, located in the Dallas ary. A spring preview event
suburb of McKinney, Texas. in late March did bring
Customers’ reluctance more customers in and
to spend has sent Weeks’ sales picked up, but busi-
sales down 12 percent ness fell back again once
so far this year from the the event was over.
same period of 2015. The “The trouble is getting peo-
problem goes beyond the ple through the door,” says
Dallas area — Weeks also Sandler, whose store is in a
has a wholesale business, recently-opened shopping
supplying merchandise to center in Burlington, Massa-
other retailers around the chusetts. “You have to en-
country, and they report tice them with events and
their customers are hesi- a reason to be there,”
tant too. She’s putting together a
The Commerce Depart- calendar of events tied to
ment’s monthly report on holidays and other occa-
consumer spending shows sions. So is the shopping
the trend: Spending crept center’s operator. q
up just 0.1 percent in De-
cember, January and Feb- US consumer borrowing rises at weak pace again
ruary, falling from an aver-
age monthly increase of C. S. RUGABER percent after slipping in ports, widening the trade final three months of last
nearly 0.4 percent the pre- AP Economics Writer January. Total outstanding deficit.Business investment year. Analysts expect con-
ceding nine months. Re- WASHINGTON (AP) — U.S. credit increased $17.2 bil- has been lackluster and sumer spending to pick up
tailers of all sizes are feeling consumers borrowed at a lion to $3.57 trillion. U.S. manufacturing is strug- later this year and boost
the impact — for example, modest pace in February Americans barely in- gling in the face of a stron- the economy. Business-
Gap Inc. said a key mea- for the second month in a creased their spending ger dollar, which has made es have continued to hire
sure of its sales fell 2 per- row, evidence of ongoing in February for the third U.S. goods more expensive at a solid pace, suggest-
cent in February. But small caution that has kept a lid straight month. More hir- overseas. Yet so far this year, ing they remain generally
and independent retailers on spending this year. ing and cheaper gas may consumers have been re- confident about the econ-
that don’t have the finan- Borrowing rose at a 5.8 per- have also reduced some luctant to ramp up spend- omy’s outlook. The borrow-
cial cushions the big play- cent annual rate, the Fed- consumers’ need for cred- ing. That has prompted ing figures include student
ers do are more vulnerable eral Reserve said Thursday, it cards. Economists are many economists to lower and auto loans, as well as
when consumers get cau- just above January’s 5 per- closely watching consumer their estimates for growth credit card debt. They ex-
tions and revenue falls. cent pace. January’s climb behavior, as their spend- in the first three months of clude housing-related debt
Shoppers feel uncertain was the smallest in more ing has emerged as a key this year to an annual rate such as mortgages and
because of a stock market than two years. The use of source of growth this year. of 1 percent or below. That home equity lines of credit,
that fell more than 10 per- revolving credit — mostly Weak overseas economies would follow a tepid 1.4 and other housing-related
cent in six weeks and the credit cards — rose just 3.7 have weighed on U.S. ex- percent growth rate in the debt.q
recent terror attacks in Eu-
rope, says Bob Phibbs, CEO
