Here’s the latest news from Consumerville where the green shoots are apparently much harder to see.
From Bloomberg by Bob Willis entitled: U.S. Economy: Consumer Spending Slows as Job Losses Mount
“Consumer spending in the U.S. fell more than forecast at the end of the first quarter as mounting job losses threatened to weigh on a projected economic recovery later this year.
Purchases decreased 0.2 percent in March, the first drop this year, the Commerce Department said today in Washington. Other reports showed wages and benefits rose at the slowest pace on record and firings continued, straining American workers.
“The consumer is coming out of a state of shock into something more positive, but not booming,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. “I don’t think we’ll see the big declines in spending we had late last year, but we won’t see big increases either.”
Decreasing employment, incomes and home values are likely to plague consumers for much of the year, prompting a boost in savings that may limit spending. Policy makers are counting on low borrowing costs and stimulus spending to revive demand in the second half of the year and end the worst recession in at least a half century.
A report from the Institute for Supply Management-Chicago showed business activity contracted this month at a slower pace than forecast, raising speculation that factories are making inroads in trimming bloated inventories. The group’s business barometer increased to 40.1, the highest level since September, from 31.4 the prior month. Readings below 50 signal a contraction.
Separately, Labor reported 631,000 Americans filed applications for jobless benefits in the week that ended April 25, and the total number of people on jobless rolls rose by 133,000 the prior week to 6.27 million, the 13th straight time the figure has set a record.
“You aren’t going into a recovery with a very strong consumer,” said Roger Kubarych, chief U.S. economist at UniCredit Global Research in New York. ‘This is still a very soggy, weak labor market. This is why the recession is so bad.'”
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