It appears that consumer spending is not going up as quickly as expected and there are fears that stores will be left with unsold inventory. This shows a decrease in consumer confidence as the job market still has not improved much. This is not good news for stores, who were hoping to see spending by consumers increase. As a result, retailers are more conservative when planning for future sales and there is some concern that the back-to-school sales, usually a heavy selling season, will be poor. Retailing usually tells how well an economic recovery is going, but sales have dropped off since April. The Gap is concerned and plans to keep their inventory focused on t-shirts and jeans for the holiday season. Macy’s and Saks expect little or no growth. At the other end of the economic spectrum, car sales in June were better than this time last year, but down from May.
As the recession continues, it seems as though retailers are feeling the effects also, but seem somewhat optimistic. Hopefully, the job market will improve and consumers will be willing to spend. More needs to be done to encourage hiring and produce jobs that bring about more economic growth.
Holmes, Elizabeth and Justin Lahart. "Retailers Stock Up on Caution." The Wall Street Journal. 9 July 2010.
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