Friday, March 12, 2010
A Hopeful Economic Sign: February Retail Sales Jump
This article talks about how retail sales have risen during the month of February which is a positive sign that the economy is slowing recovering. However there are some people who think that it would take quite a while for the economy to recover. They talk about how the change in consumers' spending pattern is permanent and that people have learned to live within their means.
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Although February sales are remarkably better than December and January’s, I agree with Bryan Eshelman, a managing director in the retail practice at AlixPartners, who said that American consumers have undergone a fundamental shift in their mentality. With the unemployment rate still at a very high 9.7 percent, Americans have adopted more frugal spending behaviors, and I think they will remain wary for some time.
ReplyDeleteWhile the slowdown in spending by Americans may be bad for retail, it might be positive in the long run when looking at investment and current account balances.
ReplyDeleteIt is true that consumer’s spending patterns are changed during the recession. However, it is also true that both of market and consumers are flexible enough to adopt the change of economy in any phase. Therefore, I think it would not be a problem to stimulate consumer to spend more. Nevertheless, what I am concerned is whether a risen trend in one month is convincible enough to assert the future trend.
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