From Forbes on May 4, 2015:
When gas prices began to decline late last year, consumers immediately felt the relief during the heavy spending holiday season, and confidence in the economy reached levels not seen since before the Great Recession. As 2015 dawned pump prices remained low, economic sentiment continued at elevated levels, yet consumers didn’t follow through with a “spend, spend, spend” mantra for the New Year.
Conventional thinking would tell us that the positive outlook for the economy combined with the relief from one of consumers’ bigger burdens would equal robust spending, perhaps even leading the U.S. to that “recovery” we’ve been hearing so much about. And while March retail sales didn’t disappoint, this could be attributed to the early Easter this year and perhaps not so much to the extra savings at the pump.
Conventional wisdom may have applied back in 2006; however, post-recession consumers are more of an enigma. Today, shoppers’ new normal is characterized by cautious, planned spending; focus on personal financial stability; and skepticism regarding the macro issues that might upset their personal microcosms. One month of solid retail sales does not a trend make, and one must keep a near constant eye on shoppers in order to gauge which direction they may be headed next. Continue reading