Profit Confidential Warns: Stalemate Distracting from Bigger Issues in U.S. Economy

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Profit Confidential, an e-letter produced by Lombardi Publishing Corporation, releases an expert opinion on how the stalemate in congress is drawing attention away from larger issues in the U.S. economy that need to be addressed.

Profit Confidential (www.ProfitConfidential.com) an e-letter published by Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, warns readers that the stalemate in Congress has been a distraction from much bigger issues facing the U.S. economy.

“All of this fighting in Congress has taken the spotlight away from what is really important—the third-quarter earnings season,” says Profit Confidential financial expert George Leong. “It’s early on, but we are already seeing some hints that corporate America and the retail sector are not faring as well as we want them to, but this is no surprise, given that gross domestic product (GDP) growth is still muted.”

Of the 109 companies that have reported guidance for the third quarter, a record 90 firms (83%) have, thus far, issued negative guidance. What concerns Leong most, however, is the lackluster reporting from the retail sector; indicating a stalling in consumer spending. Spending on credit cards fell for the third straight month in August; considering financing rates are at relatively low levels in an attempt to spur spending, this is a big red flag, as consumer spending accounts for a large majority of the country’s GDP. (Source: “Earnings Insight,” FactSet web site, October 4, 2013; www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_10.4.13.)

“In the retail sector, based on info from the International Council of Shopping Centers, revenues at 10 retailers increased 3.6% in August, which is well down from the six percent rise in August 2012. This is not a surprise, given the economic uncertainties out there and the stale jobs market,” Leong adds. “The lack of stronger sales growth at discounters is a real concern going forward, and indicates the economy is not progressing as we would want, which will impact the retail sector.”

As the U.S. moves into the fourth quarter, Leong suggests caution when looking at the retail sector, especially with the key holiday shopping season approaching and companies in the retail sector still acting cautiously.

Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation and Profit Confidential, visit www.lombardipublishing.com.

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Release ID: 24318

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Organization: Lombardi Publishing Corporation
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