A1: The American consumer.
For the third straight month, retail sales have declined even though gasoline is $1/gallon cheaper than in March 2014. There’s supposed to be a lot of free cash floating around in the pockets of consumers ready to be spent, perhaps equivalent to a $100B tax cut. So, blame consumers. They aren’t spending as they should.
A2: The weather.
Yes, it’s been a pretty rough winter. But, the weather didn’t seem to impact grocery stores and online retailers at all. Quite the opposite, in fact.
According to an article in Fortune, it may be the American consumer and the weather. That’s what’s called economists arriving at a “consensus.”
To that consensus, The Motley Monk offers a different answer:
A3: Savvy taxpayers.
With tax payments due in about one month, those who pay taxes are very well aware that their disposable income is decreasing, all due higher taxes. Saving $$$s today or having to deal with the IRS tomorrow? Taxpayers aren’t spending as freely as they otherwise world.
Compounding higher taxes is the generalized fear about the state of the nation’s economy. The only thing fueling it today are unsustainably low interest rates and, as soon as the Fed increases those rates perhaps as early as late summer, the bloom will be off the rose. The only question is: How much? Will there be an economic rough, soft, or crash landing? Savvy taxpayers think it’s better to have “cash in hand” than to be caught “cash poor.” And that's to say nothing about the nation’s debt. A Republican controlled Congress is set to raise the debt ceiling yet again.
Savvy taxpayers are worried about the economy and what the future may bring. Rather than spend lavishly, they’re spending wisely—what’s needed rather than what’s wanted—and hoping for the best.
Very, very smart.
Today, those who don’t pay taxes are receiving more benefits than ever, all care of those who pay their taxes. Those who are receiving increased benefits (=increased taxfree income) are the ones having more disposable money than they ever did. That’s what radicals call economic “social justice.”
So much for the economy, almost seven years into the era of “hopium and changium.” It really does represent a “fundamental transformation.”
Let the discussion begin…
To read the Fortune article, click on the following link:http://fortune.com/2015/03/12/retail-sales-disappoint/