Tags: Kellner | consumers | spending | retail

MarketWatch's Kellner: Consumers Struggling Financially

By    |   Tuesday, 15 July 2014 03:10 PM

The prognosis for many consumers is bleak, says Irwin Kellner, chief economist for MarketWatch.

Retail sales rose only 0.2 percent in June, compared with a 0.6 percent median forecast from economists surveyed by Bloomberg.

"Looks like that seasonal dip in consumer spending earlier this year was more than seasonal. It appears to have carried over into the second quarter," he writes in a column for MarketWatch.

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"Incomes may be up, but not everyone is enjoying these gains. The top 10 percent are doing fine, thanks to their holdings of stocks and real estate. The middle class is not doing as well.

"Unfortunately, these are the customers that most retailers depend on."

Consumers lack confidence, Kellner says. "And with good reason: 60 percent of households think that they are not likely to achieve the American dream. More than half can't afford the house they live in."

In addition, he notes, "Most consumers are finding that their paychecks don't go as far as they used to, thanks to soaring prices of food, energy, healthcare and college tuition. As a consequence, many have become extremely careful shoppers: They buy only what they have to from the least-expensive outlet."

Consumer spending will likely remain stagnant, Kellner says, and other sectors of the economy don't look much better. "Talk about a funk!"

To be sure, some analysts are more optimistic about the consumer sector than Kellner is.

"Consumers will likely gain more confidence to spend as the job market improves and summer travel season hits full swing," Randy Hopper, credit cards vice president at Navy Federal Credit Union in Vienna, Va., tells Reuters.

"We are optimistic that the second half of the year will deliver stronger sales growth."

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The prognosis for many consumers is bleak, says Irwin Kellner, chief economist for MarketWatch.
Kellner, consumers, spending, retail
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2014-10-15
Tuesday, 15 July 2014 03:10 PM
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