mauldineconomics.com / BY TONY SAGAMI / AUGUST 30, 2016
This week’s article is a follow-up to last week’s article (which generated a lot of attention) about stressed-out, tapped-out American consumers.
The Dow Jones Industrial Average has been going sideways ever since the Commerce Department reported that retail sales in July came to a grinding halt (0.0%) in the month of July.
At the same time, the list of companies warning of disappointing sales—Starbucks, McDonald’s, Ford, Burberry, Gap, and many others—suggests trouble in shopping paradise.
Most recently, Target reported a Q2 drop of 1.1% in same-store sales and said it expects a “challenging environment in the back half of the year.”
There are many reasons why Americans have become reluctant shoppers, such as stagnant incomes and rising debt loads, but one of the underappreciated challenges is a distinct change in spending psychology.
According to Deutsche Bank, Americans are becoming big savers.