Let's get off this nasty cliff
December 19, 2012-- Furniture Today,
In fact, if statistics were music, we could have been singing the opening bars to "Up, Up and Away" by the Fifth Dimension.
But when we opened our eyes, rather than flying in a beautiful balloon, we suddenly found ourselves precariously perched on the very edge of a nasty cliff named fiscal.
So, what's that mean to retailers counting down the shopping days till year's end - or to the consumers who seem to be counting every last dollar?
According to at least one consumer confidence index, the notion of falling off a fiscal cliff has consumer confidence taking a swan dive.
Last week's consumer confidence index report released by Thomson Reuters and the University of Michigan showed that consumer sentiment fell to 74.5, a significant dip from November's 82.7.
The authors of the report also noted that when respondents were asked to identify what economic news they had most recently heard about, 25% of them commented that they had heard about the possibility of higher taxes in conjunction with news about the fiscal cliff.
Since consumers' outlook is often seen as a predictor of their planned discretionary spending, which represents some 67% of the U.S. economy, the report cautioned that the most recent dip in consumer sentiment could spell trouble for retailers who rely on fourth-quarter holiday sales.
When the survey looked at the dip in confidence by household income, it learned that the drops were most severe among those in the top-third and bottom-third income levels.
Confidence among middle-income families fell 3.9 points in early December from late November. Meanwhile, confidence among low income households and top-income ones fell 9 points and 12 points respectively.
Even more troubling is that every day we get closer to the cliff with no solution in sight.
Republicans and Democrats got us up here. Isn't it time for both sides to work together to get us down?
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