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    The Consumer: Better Than Feared, but Still Struggling

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    On the heels of better-than-expected October retail sales report, Wal-Mart and Target -- the nation's two largest retailers -- posted healthy increases in same-store-sales for the third quarter Wednesday.

    For Wal-Mart, that's a pretty big deal. The 1.3% uptick reverses a 9-quarter streak of negative sales growth at stores that have been open for more than a year. Target same-store sales increased 4.3%.

    It was just two months ago that fears of another recession had gripped global markets. But in those few months, GDP and retail sales have surprised to the upside, calming fears that the U.S. might be headed back into a period of negative growth.

    All these positives are certainly welcomed, but,  as The Daily Ticker's Aaron Task and Henry Blodget discuss in the accompanying video, by no means does this signal the U.S. consumer is back and ready to fuel a full-blown recovery.

    Underscoring this point is the fact that the savings rate in this country has dropped back down to the 2007 lows before the debt-bubble (housing bubble) burst. On average these days, Americans are saving only around 4% of earnings a month.

    To further highlight the struggles facing most Americans, we learned last week that 49 million people are living in poverty, a much higher number than previously thought. At the same time, the real unemployment rate is roughly 16% when you include the underemployed, and wages continue to shrink. (See: Taken to Task: A Poverty of News, an Embarrassment of Media)

    And there are further developments today on the decline of America's middle class, which The Daily Ticker has covered extensively over the years. A new study by Standford University, using U.S. Census data, found that middle class neighborhoods have shrunk dramatically since the 1970s. "In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970," reports the New York Times.

    So while the average consumer is doing better than feared, a recovery is not imminent and not likely for months -- or years -- to come.

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    43 comments

    • MD  •  6 months ago
      Even though i'm not living in poverty, i act like i am. I refuse to spend another dime on frivolous crap when i feel like the markets could collapse at any moment.
      • katgod 6 months ago
        More people should take your advice, you don't need a lot of frivolous crap, at least that is what I have found but it does take people awhile to discover this.
      • Barbara 6 months ago
        ...and I refuse to spend my US$11M on USA SOIL & in your multinational corporations in my countries of residence -- until your countrymen wise up & vote out the crooks . :-) ...especially those who are allied with the Fannie Mae & other bankers.
      • Ripped off 6 months ago
        Our income has remained the same over the past few years, but we have cut back on a lot of things and reduced our spending. This economy is too unpredictable.
    • John S  •  6 months ago
      Crude's on the march - let's revisit the state of the American consumer in a few weeks, shall we? Meanwhile consumers - pay for your apathy at the pump!
    • jeff  •  6 months ago
      Bull! We are in a sever recession. These economist are stupid and so are the Gov. statistics.
      I only buy what i need like necesities. I have no faith in Congress or the Gov. economist.
      I do my own thing.
      • MICHAEL 6 months ago
        its severe
      • Mr 6 months ago
        I know! I keep cutting my arms and legs off! This economy sucks!
    • ANNMARIE  •  6 months ago
      There WERE fears of another recession? Enough with the technicalities of what defines a recession. The people have been living through a REAL recession in their own personal lives. The people who are out there spending are either very wealthy and would be spending anyway, or they are the people who never put a dime into their homes that went into foreclosure and are living rent-free until they get kicked out. My business has been struggling more now than last year and the prospects for our City are not good. I'm doing what I can to pay my bills and NOT spend money on unnecessary expenditures in case of an emergency.
    • VaVikingsFan  •  6 months ago
      Oil is climbing fast, spending will be back in the tank again in a couple of weeks.
      • Ken 6 months ago
        That's what I think!!
    • T  •  6 months ago
      We are no longer considered "Americans" we are just consumers in the minds of our government
    • AT  •  6 months ago
      I think it is not a good indicator to look at sales figures from Target and Walmart. They have been greatly increasing the number of stores that sell a large selection of groceries and produce. Those increases and Target and Walmart could be at the exspense of mailine grocers.
    • 2012Correction  •  6 months ago
      Happy 15 Trillionth birthday Mr. National Debt Clock!!!!
    • N.M  •  6 months ago
      Finally, some straight talk. If last year I made $50. and my projected earnings this year were $25 and I made $26, beating estimates, it still means I'm in trouble. Investors need to be wise to the rhetoric.
    • Joseph  •  6 months ago
      The only thing that has increased in this economy is the amount of debt that Americans are taking on.
    • Smoke is hungry  •  6 months ago
      This article just gives speculators the info they need - that the American public isn't quite tapped out yet - time to raise fuel prices!!
      • ENOUGH 6 months ago
        the GOP congress to raise taxes on the middle class
    • seriously....  •  6 months ago
      Found out last night from a Chicago alderman that the ratio of Chicago public workers to boss is 8 to 1....the average class size of children to teachers is around 25 to 1. Explain how that makes sense.
    • A Yahoo! User  •  6 months ago
      I spending only on things needed to survive WWIII.
    • Caellyn  •  6 months ago
      Don't you just love a society based on debt and consumption with the Federal Reserve there to rig the game? I don't.
    • Len T  •  6 months ago
      Promote debt financed spending as a solution. Makes no sense. Why doesnt our government promote corporate spending on their employees in the form of higher wages and new hires?
    • The_Mick  •  6 months ago
      "In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970," reports the New York Times. +++++ $1 out of every $6 earned by those Middle Class families then has now been redistributed to the top 1%. And yet the remnants of that Middle Class and the resulting poor class continue to vote for those looking out the wealthy and parroting their self-serving comments that make little sense about fair income distribution like, "A poor man never gave me a job." So what? Why does that justify the rich man paying you like a peon and skimming much more than he needs from your paycheck?
    • Michele  •  6 months ago
      Are these people blind and no brain? Of course Wal-Mart, because everyone is trying to find the cheapest goods they could find. Except the goods from China and developing countries that are mostly sold in 99 cents or discount stores, where can you find cheap goods? These economists are helping or driving the economy to the cliff. If we just put a bandage on this blown economic wart without removing and digging the root of it, it will come back, always. Or you pray for a miracle.
    • seriously....  •  6 months ago
      you can't print articles or post videos like this and only take into account two companies. That makes no sense. With the price of getting things done (utilities and gas and food) going ever higher on a steady plane, the media and the government are out of touch
    • Joseph  •  6 months ago
      The statistically estimated change of retail sales from Sep to Oct is +0.5%. The variation coefficient for the monthly changes of retail sales is 0.7%. It is always amusing how Wall Street people and opinionators in the media draw conclusions about the state of the economy from pure data noise.
    • samark  •  6 months ago
      I've reduced expenses in every category. That's not good for the economy but it is what I have to do with income 1/7th of 2008 income. My taxes and my spending will not increase until employment is obtained to restore the income. Minimum wage or part-time jobs won't do that. Prospects for that happening don't look good.

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