Retail Sales Data Show We’re In Recession (or at least acting like we are)
One of the classic indicators that determine if people believe they are in a recession is retail sales. This ties into consumer confidence and jobs data that help determine the health of the economy.
Today we learn that both Wal-Mart & Costco reported sales data that increased more than analysts estimated. How does this show that we’re in a recession? (or at least acting like we are)
When consumers believe that times are tough, they will make decisions that help them build an economic cushion. Luxury goods will be cut, frivolous spending reduced, and penny pinching will begin.
Where do consumers go to penny pinch? Wal-Mart & Costco!
These companies are often coined as defensive stocks because they tend to hold their own during economic downturns. People still need to consume, just at bargain prices.
So ultimately this shows that consumers are tightening their belts and therefore behaving as if times are tough. And that’s the bottom line, isn’t it? Do you need an economist of government official proclaim that you’re in a recession to feel it? No. All that maters is how you feel and currently, Americans clearly feel like they are.
