by ilene - August 13th, 2010 5:00 am
Consumer Spending Slumps Even With Back-to-School Underway; Cisco, IBM Sales Suggest Corporate Spending Slowdown
Courtesy of Mish
A new Gallup Poll shows Spending Slumps Even With Back-to-School Underway
Americans’ self-reported spending in stores, restaurants, gas stations, and online averaged $62 per day during the week ending Aug. 8. Early August consumer spending trends trail 2009 and will need to surge to match last year’s anemic back-to-school results.
Gallup’s weekly spending measure for the first week of August shows no improvement over that of the last week in July or that of the same week a year ago. In turn, this suggests that back-to-school sales are unlikely to substantially exceed last year’s depressed levels. In fact, this week’s comparable of a year ago was a big spending week, making for challenging sales comparables for many retailers this year.
Corporate Spending Slowdown
Bloomberg reports Cisco, IBM Sales May Signal Slowdown in U.S. Corporate Spending
Weaker-than-forecast sales at Cisco Systems Inc. and International Business Machines Corp. may signal a slowdown in the corporate spending that has led the U.S. recovery.
“It’s been business investment, particularly technology, that’s been in the driver’s seat,” said Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh. Should equipment spending slow significantly, “unless something else picks up the pace, it means the outlook for the economy is going to be that much dimmer.”
Corporate investment is among the few remaining sources of economic growth as the effects of government stimulus measures wane and unemployment remains stuck near a 26-year high. Economists this week cut their forecasts for the second half of the year as the more than 8 million jobs lost during the recession hamstring consumer spending.
San Jose, California-based Cisco yesterday said revenue in the current quarter will be $10.64 billion to $10.83 billion, compared with a $10.95 billion median estimate in a Bloomberg survey. The stock fell as much as 12 percent in intraday Nasdaq trading today
IBM, the world’s biggest computer-services company, last month reported revenue that missed analysts’ estimates, citing a decline in services-contract signings. Signings fell 12 percent to $12.3 billion, the second straight quarterly drop in contracts for services, which make up more than half of IBM’s total revenue.
GDP is increasingly likely to be negative at least one quarter in the second half yet few economists even discuss the possibility.
by ilene - September 15th, 2009 11:30 pm
Courtesy of Karl Denninger at The Market Ticker
by ilene - September 2nd, 2009 7:26 pm
In my larval, pre-blogging days, I always faced the back-to-school moment with abject dread. It meant returning to a program of the most severe, mind-numbing regimentation in the ghastly New York City public schools after a summer of idyllic unreality in the New Hampshire woods, where I went to a Lord of the Flies type of summer camp. And so here I am, many decades later, still uneasy as the final page of the August calendar flies away in a hot Santa Ana wind, and a great hellfire closes in on the far eastern reaches of Los Angeles, and the American money system falls into a peculiar limbo, and every fifth person is out of work, or going bankrupt, or glugging down the seawater of default, or being denied coverage by health insurance that he-or-she has already shelled out ten grand for this year, or getting shot in a trailer park.
I was in Los Angeles for a few days last week, as chance had it, marveling at the odd disposition of things there. I’ve been there many times over the years, but you forget how overwhelmingly weird it is. Altogether the LA metro area has the ambience of a garage the size of Rhode Island where someone happened to leave the engine running. To say that LA is all about cars is kind of like saying the Pacific Ocean is all about water. But one forgets the supernatural scale of the freeways, the tsunamis of vehicles, the cosmic despair of the traffic jams. The vistas of present-day LA make the Blade Runner vision of things look quaint in comparison.