Consumers' retrenching causes an economic recession

by Daniela Simkova

The U.S. economy is headed towards recession according to Wall Street presenting weak retail sales numbers. The nation's biggest bank, Citigroup Inc. came with a not pleasant results in retail sales as well, that get the investors in a bad mood. Investors are afraid of the economic slowdown caused by the consumer decline in the retail sales. If the consumers will continue spending less money the economy of U.S. will certainly come to recession. The consumer spendings makes more than two thirds in U.S. economy and that is the major fact that was supposed to get the U.S. economy out of the recession problem. Unfortunately it turned in a different way, the consumers are in retrenchment and investors are rather pessimistic in the views on U.S. economy growth. There is also a speculation about the Federal Reserves. Some people are afraid that Feds' did not do enough to avoid the economic recession. They think that Federal Reserves could cut the rates in more expanding way. Scott Wren, a equity strategist for A.G. Edwards & Sons says: "When consumers are beaten over the head about how bad things are, pretty soon they believe it and that affects their spending habits. And when there's a lot of uncertainty out there, the Fed needs to be a little more aggressive ╉ I think they need to cut more than just at this next meeting."

by Daniela Simkova for PocketNews (http://pocketnews.tv)

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Posted by: Maria Vidlickova