Was bullish in ever-y detail;
All the gifts that were sold
Decisively told
A surprisingly good Christmas tree tale.
But the 1st quarter figures & facts
Describe a consumer that lacks
A spending position,
Since broad imposition
Of 2% more payroll tax.
The US retail sales numbers for December were announced on Tuesday, and painted a picture of robust holiday consumption. The 0.5% quarterly increase was much better than expected, and much faster than the rate for the previous two quarters. However, it looks as though the momentum may not carry through to the 1st quarter of the new year. Weekly retail reports in January have already fallen below expectations, and the reason seems clear: most US workers now have less take-home pay, thanks to the increase in the payroll tax by two percentage points to 6.2%, from the temporary, "stimulus" rate of 4.2%. Other indicators appear less than bullish, as well: the Federal Reserve Bank of New York reports that manufacturers in its district (which is also my district) continue to reduce their activity. The ongoing drama of the fiscal cliff and debt ceiling doesn't help, either.
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