Holiday outlook bleak as Americans see more economic troubles
Amid expectations of falling home prices, foreclosures, job cuts and concerns about toy safety, Americans are girding for their gloomiest holiday season in years.
By Agencies |
WASHINGTON: Amid expectations of falling home prices, foreclosures, job cuts and concerns about toy safety, Americans are girding for their gloomiest holiday season in years.
The struggling economy, tighter credit, high energy prices and the calamity in the real estate market are just part of the bleak picture as the year-end holidays approach.
Consumers are expected to be cautious in their holiday spending plans; gifts and toys are under close scrutiny because of numerous safety recalls, which may also lead to shortages of popular children's items, say analysts.
Not surprisingly, US consumer confidence has slumped to a two-year low amid weakening business and job-market conditions, a Conference Board survey showed.
The business research company said its consumer confidence index fell to 99.8, down from a revised 105.6 in August.
The outlook is troubling at the approach of the Christmas season, when consumer spending -- about two-thirds of US economic activity -- is the greatest.
Advisors.
John Challenger, chief executive of the consultancy Challenger, Gray & Christmas, said with retailers bracing for sluggish sales, that means hiring will be scaled back as well. "With new reports showing that consumer spending and confidence are dropping along with home values, retailers are undoubtedly getting more skittish about holiday sales prospects," Challenger said.
"If the strength of the dollar continues to erode and the housing market worsens going into the holiday season, retailers may have no choice but to limit seasonal hiring. Some may even be forced to cut workers in order to
preserve profit margins."
"With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending," said NRF chief
The struggling economy, tighter credit, high energy prices and the calamity in the real estate market are just part of the bleak picture as the year-end holidays approach.
Consumers are expected to be cautious in their holiday spending plans; gifts and toys are under close scrutiny because of numerous safety recalls, which may also lead to shortages of popular children's items, say analysts.
Not surprisingly, US consumer confidence has slumped to a two-year low amid weakening business and job-market conditions, a Conference Board survey showed.
The business research company said its consumer confidence index fell to 99.8, down from a revised 105.6 in August.
The outlook is troubling at the approach of the Christmas season, when consumer spending -- about two-thirds of US economic activity -- is the greatest.
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"We could have a less-than-stellar holiday shopping season to say the least, and if that indeed does happen I think we're looking at a real potential for a recession in the economy," said economist Joel Naroff of Naroff Economic Advisors.
John Challenger, chief executive of the consultancy Challenger, Gray & Christmas, said with retailers bracing for sluggish sales, that means hiring will be scaled back as well. "With new reports showing that consumer spending and confidence are dropping along with home values, retailers are undoubtedly getting more skittish about holiday sales prospects," Challenger said.
"If the strength of the dollar continues to erode and the housing market worsens going into the holiday season, retailers may have no choice but to limit seasonal hiring. Some may even be forced to cut workers in order to
preserve profit margins."
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The National Retail Federation predicted sales will rise 4.0 percent, the slowest pace since 2002."With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending," said NRF chief
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