Consumers Still Kicking

By Andrew Paparozzi
In May 13, 2008

Are consumers retrenching? Consumer spending represents over 70.0% of gross domestic product (GDP). So any shifts in consumer purchasing behavior has definite implications for the general economy and different sectors in particular.

The latest data from the Census Bureau show that retail and food services sales were down 0.2% in April from the previous month and 2.0% above a year ago. These data do not adjust for price changes, and we all know what’s happening there. Year-to date, sales at gasoline stations are up 20.8% from the similar period in 2007. Sales at food and beverage stores were up 6.1%. No doubt, these gains, if we can call them gains, mainly reflect higher prices. Sales declines were concentrated in motor vehicles, furniture and home furnishings, and building materials and supplies.

Thus, it is apparent that consumers are postponing the purchase of big-ticket items such as autos, furniture, and home remodeling. However, gains in general merchandise stores, sporting goods and hobby stores, electronics and appliance stores, health and personal care stores, and food services and drinking places, show that they’re not in total retrenchment, at least not yet. And don’t forget, three-fifths of consumer spending is in services. We’ll review these in an upcoming posting. Pronouncements as to the complete demise of the consumer sector may have been greatly exaggerated.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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