When consumers receive an income, those funds can go into savings or spending. Consumer spending is the measurement of funds dispersed (not in savings) and that can go into goods and services that consumers deem warranted. This can include durable goods, such as washing machines, and non-durable goods, such as food. As the U.S. economy is comprised of over 70% consumer spending, this is a very important piece of economic data.
Consumer Spending was last modified: May 29th, 2015 by admin
It would be great to have a crystal ball and see what 2016 will bring. But with so much volatility going on, many investors cannot look beyond the current quarter, especially after the abysmal third quarter that just ended. For momentum and income investors, there are some great dividend stocks out there that will protect your capital .
While most stocks and the underlying sectors are struggling to post gains in 2015, the consumer discretionary sector has been one of the top performers this year. With the U.S. economy showing signs of sustained growth, consumer discretionary stocks may continue to be the top performers in 2016.
Consumer Discretionary Sector
I have written over and over again on how distorted the U.S. business sales and inventory figures are. Manufacturers are stockpiling products. Retailers are experiencing a decline in sales. Consumer spending is getting softer. But it’s more than just retail that is becoming a drag on the U.S. economy.
Statistics from the U.S. housing.
What used to be a leading indicator, the stock market has now become a lagging indicator. For months (in these pages), I have written about how sick the U.S. economy has become. Stock market investors are waking up to the reality that world economic growth is either non-existent or even contracting—albeit too late.The Dow Jones Industrial.
In the month of July, the Conference Board’s Consumer Confidence Index declined nine percent from May. The index stood at 99.9 in June and plunged to 90.9 in July—the lowest level since September of 2014!
A sub-index of this confidence index, called the Expectation Index, which measures how U.S. consumers feel they will do going .
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.