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[경력] '24년 Amorepacific_기술기획 직무 채용
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By
Reuters
Published
May 24, 2010
Reading time
4 minutes
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U.S. consumers pull back after false start

By
Reuters
Published
May 24, 2010

(Reuters) - After a false start, American consumers are not ready to return to their big spending ways just yet.



A spike in spending in March and April pumped up expectations an economic recovery led by U.S. shoppers was picking up steam. But stubbornly high unemployment at home and a growing financial crisis in Europe is rekindling fears of a new slowdown.

"Just watching the news, I watch CNBC, I feel nervous. Even when the market goes up, I fear that it's temporary," said Elvira Petigrow, a stay-at-home mother from West Orange, New Jersey, who was browsing for a dress on Thursday 20 May at Macy's in Manhattan.

"I'm looking around the store and I could probably buy anything I wanted here, but I'm being very, very careful."

Such anxiety is a departure from the sense of optimism apparent in early spring, when U.S. consumers started to spend more freely, updating wardrobes and revisiting favorite restaurants.

In March, top U.S. retailers reported their strongest sales gains on record, collectively posting 9.1 percent sales growth at stores open at least a year.

But in the last few weeks, Europe's debt crisis and the swooning euro have hit global stock markets hard. In the United States, jobless claims unexpectedly rose last week, making it clear unemployment rates will not come down any time soon.

On Thursday 20 May, Standard & Poor's 500 Index .SPX fell 3.9 percent. The S&P Retail Index .RLX was down 3.2 percent and has lost 14.4 percent since hitting a 52-week high on April 26. That has prompted some economists to question whether a recovery ever truly started in the first place.

"No one can explain what went on in mid-spring here, but the best guess is that a bunch of people finally decided to stop paying their mortgage and went shopping," said Douglas Holtz-Eakin, an economic advisor to former presidential candidate John McCain in 2008. He is also the current president of the American Action Forum, a Washington think tank.

SPEED BUMP

There is ample evidence the recovery has hit a speed bump. Building permits dropped to a six-month low and the housing market, which had shown promising signs of recovery this spring, may be losing steam as well.

Many economists suspect the rebound in sales and prices this spring may have been caused by a government tax credit that expired at the end of April. Mortgage applications dropped 27 percent to a 13-year low last week, which suggests home purchase demand has dried up.

Goldman Sachs economist Jan Hatzius has forecast U.S. annualized gross domestic product growth will slow to 1.5 percent in the second half of the year from 3 percent in the first half.

"There's not enough in the combination of jobs, hours and wages to sustain what we're seeing. Net worth has taken a huge hit," said Holtz-Eakin.

Executives at top U.S. retailers -- from department store chains Macy's Inc (M.N), J.C. Penney Co Inc (JCP.N) and Kohl's Corp (KSS.N), to discounters Wal-Mart Stores (WMT.N) and Target Corp (TGT.N) -- are also dampening expectations.

"More than ever, our customers are living paycheck-to- paycheck," said Wal-Mart Chief Financial Officer Tom Schoewe earlier this week.

Analysts noted Wal-Mart's core lower income customer was under even more under pressure these days, prompting them to spend even less at the world's largest retailer.

Target CEO Gregg Steinhafel said the concerns weighing on consumers was making their purchasing harder to predict.

"We're going to find good weeks, bad weeks, and good (months) and bad months," he said.

While many retailers reported strong results in the last week, they also gave weak profit forecasts and warned investors that growth rates would wane by year's end.

A LESS LUXE LIFE

TJX Cos Inc (TJX.N), which operates the off-price chains T.J. Maxx and Marshalls, was one of the biggest winners during the downturn and stole market share from department stores. But even TJX was modest when it gave its profit outlook earlier this week and investors punished the stock.

Others that were gun-shy in their forecasts run the gamut from office supply retailer Staples Inc (SPLS.O) and off-price chain Ross Stores Inc (ROST.O) to women's clothing store Chico's FAS Inc (CHS.N) and Limited Brands Inc (LTD.N), which operates Victoria's Secret and Bath & Body Works.

At the top end of the shopping spectrum, the latest stock market slide could curtail a resurgence of luxury spending.

Earlier this year, Saks Inc (SKS.N), Nordstrom Inc (JWN.N) and Neiman Marcus Group Inc NMRCUS.UL boasted some of the strongest monthly same-store sale performances.

Saks CEO Stephen Sadove has frequently said the luxury market's fortunes are intimately tied to where the stock market is and how that affects people's sense of their net worth.

On Tuesday 18 May, he warned investors that the pace of economic recovery remains uncertain.

(Reporting by Phil Wahba in New York and Emily Kaiser in Washington; additional reporting by Brad Dorfman in Chicago)

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