Consumers Becoming More Thrifty Amidst The Global Financial Crisis

We have seen the worst of the Global Financial Crisis according to the latest figures and news as reported by The Australian.

With improving figures coming out of the US and a levelling out of the job market, there is plenty of reason for optimism as seen by The Wall Street Journal.

But wait, there is more:

• Profits in large US companies are up, says Business Week.
• Data is generally consistent with early recovery, Goldman Sachs says.
• After well over a year of decline, the manufacturing sector is picking up.
• For the first time in 12 months, the Institute of Supply Management says that its August index topped the 50 mark that divides shrinkage from growth.
• Executives in some 11 industries are jubilant over new orders and sales.
• Plus throw in an improvement in home sales.

So what exactly is going on with the global financial crisis?

Well, despite all the jubilant and positive reports it is still early days. At this stage we are unsure whether consumers are spending enough cash and back-to-school figures in August showed a negative sales of 3 per cent.

Right now we are still batting our breath to wait and see how this economic showdown is really affecting us on the bottom line. Retail sales of women’s clothes (except shoes), household goods, and even electronics were down in August from a year earlier for the 12th consecutive month.

Retailers are now worried about the upcoming Christmas season. Credit card debt is still being paid off by low and middle income earners. At present nobody knows how our spending will pan out in the long-term.

Despite all the current reports about the GFC, one thing seems certain if we want to believe the economists; we are back from the brink. At this stage the worst of the global financial crisis is behind us.

Source: The Australian

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