Skip to content
Subscriber Only
Gary Shilling

Where Have All the Consumers Gone?

Consumers aren't opening their pocketbooks because wages remain low, companies continue to cut labor costs, home prices are still below their pre-recession peak, baby boomers need to bolster retirement accounts and, most ominously, deflationary expectations may have taken hold.
Just looking, thanks.

Just looking, thanks.

Photographer: Victor J. Blue/Bloomberg

Retail sales rose less than expected in March after declining for three consecutive months. Since the U.S. began collecting data in 1967, only twice has it seen three-month stretches of waning retail sales in non-recessionary times. 

This is puzzling. Why would consumers spend less as the economy picks up steam? And why haven't consumers gone shopping with the one percent extra income that collapsing oil prices have handed them?