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Source: Econoday |
Econoday: - In the first indication on the economic effect
of the ongoing standoff in Washington, ICSC-Goldman's
same-store sales index slipped 0.1 percent with the
year-on-year rate slipping to plus 1.8 percent from 2.1
percent. The report cites weakness across most segments.
The Johnson Redbook same store sales index has weakened recently
as well.
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Source: Econoday |
Moreover, the ISI Restaurants Sales Survey has been quite
sluggish, though it's too early to tell if this is related to
poor consumer confidence.
Typically we have a lag between a major shift in consumer
sentiment and its full impact on spending. Perhaps a more timely
indicator of consumer behavior is the stock market. And the
stock market is telling us there is a real risk of slower
spending growth ahead. The chart below compares the Consumer
Discretionary Select Sector (XLY) with the overall market (SPY).
The underperformance of consumer discretionary shares just in
the last 3 days is quite clear. The government shutdown and the
upcoming debt ceiling uncertainty is expected to negatively
impact US consumer spending.