Retail sales in the U.S. unexpectedly declined for a third straight month in June, a sign limited employment gains are taking a toll on the biggest part of the economy.
The 0.5 percent drop followed a 0.2 percent decrease in May, Commerce Department figures showed today in Washington. The decline was worse than the most-pessimistic forecast in a Bloomberg News survey in which the median projection called for a 0.2 percent rise. Purchases last fell for three or more months in July through December 2008.
And credit card debt is ramping up as people use them to make up for losing their jobs.
I heard the Obama team has a new tactic, they pulled back the welfare reforms of Clinton and Gingrich so that people can go on welfare for eternity. They are hoping this will help to lower the unemployment numbers of 8.2%.
Thomas Sowell: There are no solutions, just trade-offs.
I really think that when 3-5% of retail sales are just the process fees and business time to process credit cards and chase the money into your accounts....that a 0.5% drop is sales would be lost in wind. This is before anyone even pays any interest or user fees.
Everything you buy that can be purchased with a card costs 3-5% more because people use their cards. When you use a reward card, the business you are shopping with pays for the rewards. Everything in my stores or that I sell is increased to cover this cost, sometimes I offer cash discounts because when you pay in cash profit can double, even when all taxes are paid).
0.5% is small compared to the 5% we give up freely. In many cases the credit card processor makes as much as the small business owner on the purchase (5%). If the business is only so so, the credit card companies and the state sales tax coffers fill before the business owner can even pay the light bill, let alone buy dogfood for his kids.
But the lack of demand and the obsession with a top down employee based society....looks a lot like this. Actually makes me think of how the democrat/lib types really stand heavily behind the trickle down concept, they just deny it, they want it all to trickle down from the employer in stead of having to go out into the market and sell themselves each day.
0.5% is small potatoes we will get to talk about real numbers soon enough, perhaps even double digits.
I still argue that in many cases, there is room for prices to fall and they should. The market will take care of this unless we try to regulate a solution.
