by Colin Lovett, PICurrent Managing Producer
So it turns out we were not very happy holiday shoppers in December. In fact, we were downright nervous. The U.S. Commerce Department today announced that retail sales fell by 2.7 percent in December. This is about double the drop expected by many economists.
Of course, this news just about brought Wall Street to its knees. Stocks fell almost 3 percent. You’d think they would expect bad news by now. I know I do.
Why are traders so nervous about this bit of bad news?
Because consumers, that’s you and me my friend, power two of every three dollars in U.S. economic activity. You might think the very wealthy control the levers of power. You’d be wrong. They own the levers, but we pull the strings.
For more than 50 years, our country has become more and more focused on consumer spending as the engine of the economy. Getting people to buy things frequently has become the most important thing. Not building things. Not inventing things. Just buying things.
So what should we do about this? Should we shop more? Go into more personal debt to help the economy?
No.
This will eventually shake out as businesses become used to less consumer spending. Saving and buying wisely are the best way for any family to survive the current recession. Maybe we’ll all be better off in the long run if less buying forces our economy to focus more on building good things that last.
To read more about this story, please visit:
