U.S. Personal Spending Slowed in April

May 30, 2008

Excerps as reported on Bloomberg.com

(Bloomberg) — U.S. personal spending slowed in April after record fuel costs, a slump in home values and a deteriorating job market eroded consumer confidence.

The 0.2 percent gain in spending followed a 0.4 percent increase in March, the Commerce Department said today in Washington. Incomes grew 0.2 percent, bolstered in part by the government’s tax rebates. Separate reports showed business activity dropped for a fourth month in May and consumer sentiment decreased to the lowest level since 1980.

Retailing stocks slumped after the figures reinforced forecasts for spending growth to slow this quarter to the weakest pace since 1991. J.Crew Group Inc., the casual-clothing retailer, reduced its earnings forecast late yesterday, citing a nationwide drop in the number of shoppers visiting its stores.

“Consumers are spending cautiously,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York, who correctly forecast the gain in spending. “The economy is in a grey area between recession and slow growth.”

Our Perspective:

Food, fuel, energy, homes and jobs! What else should we include to know that we are going thru a tough time.

Food, fuel and energy cost are increasing at record rates!

I saw on the news last night that natural gas prices are going up 20% in Phila. PA starting in June.

Electric prices in NJ are going up 14% starting in June.

Gas is breaking thru the $4.00 barrier and are projected to keep going up. I have heard reports of $5 -$7 gas by the end of the summer.

What do you think this will do to the already rising food prices?

I heard a report yesterday on NPR that consumers sales of Spam ( the noted mistery meat ) is on a rise. Spam was fed to soldiers in the field during WWII, now it is filling our refrigerators.

Is there a bright side?

Yes! This is America. We can make our voices heard and take steps to make sure in the future, proper steps are taken to insure stability. By ignoring the issues of the past we have created the problems of today. We have to stop putting bandaids on and take the necessary steps to provide long term solutions.

Hutchinson Business Solutions is dedicated to thinking “outside the box.” We work closely with our clients creating opportunities for savings while increasing efficiencies. Our solutions make sense today with our eyes focused toward the future.

Maybe it is time for our Government to introduce some ” Out of the Box ” solutions. Complacency has brought us to face the issues before us today.

Your comments are welcomed. You may email george@hbsadvantage.com  with any questions and to discuss the steps to take to increase profits for your company.


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