Despite recent reports of rising consumer spending, new data for January released today indicates spending in January slipped down to early 2009 levels.
According the Gallup Poll American consumers across income brackets reduced spending in January from December not only in store, which could be expected but in restaurants, on the web and at the gas pump. The figures are disappointing considering the bevy of data indicating wealthy shoppers were spending more despite current financial conditions.
While a cut back from December, during the holidays could be expected, data suggesting consumers purchased less in January 2010 than the same month last year during the recession are alarming. January 2009 saw retails sales decline by 10 percent and threaten the economy with a 6.4 percent contraction for the first-quarter.
Most worrisome of all though is that consumer spending in these initial weeks of February appears to be following a similar trajectory, with consumer spending curbing to 2009 levels.
The economy has seen two consecutive quarters of growth. This bodes well, but the economy remains under heavy scrutiny as the figures have been inevitably affected by the support programs in place by the Federal Government which are in the process of being cut back. The waning supports make this a pivotal time in for consumer spending.
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