Professor Mark J. Perry's Blog for Economics and Finance
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PRINCETON, NJ -- Back-to-school spending seemed to show up during the week ending Aug. 16, as self-reported average daily spending hit a new high for the year. At the same time, consumer confidence maintained its new high of the prior week and job creation eased, but only slightly.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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Both the U. Mich. and Conference Board consumer sentiment/confidence surveys have been down lately, including the expectations index.
Retail sales were up ONLY because of cash for clunkers. Government transfers have only barely maintained consumption. The summer/back to school peak is over and it's all downhill from here.
Between now and year end, 1.5 million people will come off unemployment benefits unless government extends them. Incomes are down across the board except rental income. Tax receipts are low. That means much higher deficits in the next year.
Hint: candy is already on sale for Halloween and Christmas items are also beginning to appear. The retail desperation is palpable! Small businesses are holding on by their fingernails and won't hold out until sales recovery- emergency reserves are GONE.
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