Consumer confidence takes a hit
The nation’s retailers can hope back-to-school shoppers haven’t been paying attention to the steady dose of dire economic news facing the nation the past week, but that’s pretty unlikely considering this is the information age.
Negative news about the economy is everywhere and the stock market in free fall on successive days is unsettling even to consumers who don’t have a 401K balance to worry about. When the market tanks and the United States experiences a humiliating downgrade of its credit, there just isn’t a lot to feel good about, especially considering the economy was already on shaking ground. This is true even when one’s own situation and income stream is solid, because when the sky appears to be falling everyone puckers up.
That certainly was the case last week and the fear factor has intensified this week just as shoppers are supposed to be loading up on back-to-school products. The spending outlook was already a little mixed this year with some forecasters projecting growth and others looking for moderation. But now it is anyone’s guess whether shoppers will follow through on their preseason intentions to spend more this year or whether the taint of a U.S. credit rating downgrade and the resulting market hysteria and heightened uncertainty will make them reluctant to reach for their wallets.
What’s even more unsettling is the negativity surrounding the economy, and the resulting drain on consumer confidence, is sure to persist through the fourth quarter along with political squabbles over the nation’s debt.