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Profit Confidential (www.ProfitConfidential.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is warning that the weak retail numbers point to a continued slump in U.S. consumer spending.Consumer spending in the U.S. is highly correlated to consumer confidence; if consumers are worried about the economy, they pull back on their spending. The Conference Board Consumer Confidence Index decreased 1.63% month-over-month to 78.1 in February from 79.4 in January. (Source: “The Conference Board Consumer Confidence Index Declines Moderately,” The Conference Board web site, February 25, 2014; https://www.conference-board.org/data/consumerconfidence.cfm.)
“Weak consumer confidence is also dangerous because consumer spending makes up about two-thirds of U.S. GDP,” says lead contributor and financial expert Michael Lombardi. “And if consumer spending is declining, I don’t know how U.S. GDP can grow.”
January durable goods data was also disappointing, according to Lombardi. During the first month of the year, new orders for manufactured durable goods slipped one percent, or by $2.2 billion, to $225.0 billion; the third decrease in the last four months. The one percent drop in January comes on the heels of a 5.3% decrease in December. (Source: “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders January 2014,” United States Census Bureau web site, February 27, 2014; www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf.)
The retail numbers aren’t any better, says Lombardi, with U.S. retail sector sales for January falling by the most since June 2012. Of the 13 sectors the U.S. Census Bureau looks at, nine reported month-over-month declines: the biggest retail sector drops were motor vehicle and parts dealers (-2.1%); sporting goods, hobby, book, and music stores (-1.5%); department stores (-1.5%); and clothing and clothing accessories stores (-0.9%). (Source: “Advance Monthly Sales for Retail and Food Services January 2014,” United States Census Bureau web site, February 13, 2014; www.census.gov/retail/marts/www/marts_current.pdf.)
“I’ve already seen some major economists starting to lower their 2014 forecasts for U.S. GDP growth. It’s only the beginning. I expect to see more cuts to U.S. GDP estimates as consumers continue to pull back on their spending this year,” Lombardi concludes. “How the stock market can continue to rise on the backdrop of a slowing U.S. economy and slowing U.S. corporate profits only stock market suckers can understand.”
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.
Contact Info:
Name: Wendy Potter
Email: Send Email
Organization: Lombardi Publishing Corporation
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022
Website: http://www.profitconfidential.com/
Release ID: 35727
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