Expect consumer retrenchment to worsen

October 18, 2008 at 10:14 am | Posted in credit, economics, Uncategorized | Leave a comment
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With Wall Street volatility increasing day by day, and -at the very least – delays to the bailout plan, I believe the consumer retrenchment we have seen so far this year will only deepen. Consumer spending has been under pressure from a variety of factors, from high gas prices to increasing food inflation to weakening job prospects.

Since about September 2007, I’ve been expecting consumer sentiment and spending to both weaken significantly. While the latest data points are weak, I still believe the bottom is still some way away – At the very least 2Q 2009 – with a very slow recovery after that, but I am increasingly inclined to believe that the bottom may be in 2010.

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