Consumer Spending in U.S. "Unexpectedly" Stagnated in May

[marmar]

(Bloomberg) Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back.

Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median of economists surveyed by Bloomberg News called for a 0.1 percent gain. Prices excluding food and energy rose more than forecast.

Walgreen Co. (WAG) is among retailers that indicated 9.1 percent unemployment and higher gas and grocery bills have prompted shoppers to pare back purchases of less essential goods. Federal Reserve policy makers said the restraint on purchasing power may prove temporary as commodities prices start to decline, allowing the economy to pick up later this year.

“The quarter is going to be very slow,” said Christopher Low, the chief economist at FTN Financial in New York who correctly forecast household spending. “The biggest explanation for that is gas prices, so obviously the fact that oil has fallen quite a bit in the last couple of weeks is a really good thing. Relief just in time.” ..............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-06-27/consumer-spending-in-u-s-unexpectedly-stagnated-in-may-as-prices-climbed.html

[JoePhilly]

1. Can't wait to see House Republicans pass a jobs bill. nt

[xchrom]

2. We may not good at a lot of things --

But we're sure good at being surprised.

[marmar]

3. Getting paid to be clueless.....It's good to be an economist.

nt

[xchrom]

5. ...

:spray:

[PATRICK]

7. Sums it up

and could be cross posted just about in every OP.

[mwooldri]

4. Hello, does someone need to purchase a clue stick from me?

I'll even provide free beatings if one so desires...

Lack of jobs, reduction in real earnings for those who have jobs, no more "easy credit", housing market is terrible... now threatened cuts to Social Security and Medicare and other real cuts to necessary programs.

Something is hoarding all the revenue and it needs to get moving again.

[Bonhomme Richard]

6. Makes me F*%*#%g crazy that no on speaks about the obvious.

Jobs need to be created (infrastructure would be a good star) and wages need to go up if anyone is going to have anything to spend. That money at the top has to shift downward if we are to save what's left of the middle class.
In time all the security in the world isn't going to save those bastards at the top and if they think it is they are placing a fools bet. Ask Nicolae Ceausescu.

[CleanGreenFuture]

8. Has anyone else noticed how often that the word "unexpected" has been

used to describe financial news items since the crash of '08?

I swear nearly every major economic report that has come out since then has been accompanied by a headline proclaiming its unexpectedness.

If everything in economics is unexpected, then why do we need economists?

[Donnachaidh]

10. and after the unexpected stuff, we get a flurry of *well this is better* nonsense

You can almost hear the pr campaign firing up right after these reports drop. The problem is, anyone who can blink and walk knows the bs patrol gets out in force to try to counteract reality.

Orwell is spinning in his grave. Literally.

[pinqy]

14. Why do we need economists???

....To make meteorologists look good.

[JHB]

9. well, that means profits are down (or less up than they wanted), so they have to cut jobs!

...because they need those profits to invest and create jobs... so they need to fire people, natch.


But we don't dare raise taxes on millionaires.

[alc]

11. there should be lots of job openings for "expectors"

Because whoever's been doing the expecting for the last few years is doing a REALLY bad job. What exactly do these people expect every month and why?

[SOS]

12. "Unexpected"

House value crushed.
Pensions under siege.
Stock market flat for 10 years (no gain in IRA or mutual funds)
Savings receive almost zero return.
Wages never go up.
Health care costs soar.
Food and gas prices up.
Education costs rise every year.
Mass layoffs.
Unemployment at 9%.
Credit tight.
People drowning in debt.

Who could possibly expect that consumer spending might contract?
It's a real shocker!

[GOTV]

13. But are the bankers OK? The article doesn't say if this will hurt bankers ...

... maybe the administration should send them more money just to be sure.