Retail Sales Plunge

The verdict is out; families are simply not spending their discretionary income! Retail sales plummeted to -.6% (that's right it's a negative); to show you how bad the outlook was on this the forecast was for a -.1% (that's right still a negative)! The market has already dropped almost 200 points and there seems to be strong momentum to support the downward spiral. Why is this statistic so important?

Retail sales account for approximately 1/3 of all GDP (Gross Domestic Product) so having this number be that bad really sets the stage for further declines and in turn stalled spending, credit borrowering, housing purchases and the like. To add to the problem the U.S. Dollar or otherwise known as "the greenback" is at a low against the Yen that has not been seen since 1995. Why is this so important? Simple, the value of "our" dollar is diminishing and at a fairly fast pace. This means that it will take more of our money to purchase the same goods we paid for yesterday. This also has spun negativity amongst foreign investors and in turn could translate into them pulling money out of the U.S. market all together.

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