Despite warnings of an economic slowdown and possible recession, U.S. consumers continued to spend in January, even exceeding analysts predictions, the New York Times reports today.
Almost all of the nation's major retailers, including J.C. Penney, Kmart, Sears and Target, have sold more in the last three weeks than originally planned. According to the Bank of Tokyo-Mitsubishi, which published a weekly retail index, most major chain stores will see a sales increase of almost 4% this month compared with Jan. 2000. In addition, Visa USA reports spending in restaurants and for compact discs and videos has grown more this month than it did in December, the Times reports.
According to economists, the mildly encouraging consumer data suggests the economy has not entered a free-fall, and the U.S. will most likely avoid a recession this year. So far, this remains the opinion of a majority of economists.
The Conference Board's Consumer Confidence Index declined again in December to 128.3 from 132.6 in November, but the index continues to signal economic growth. The continued decline in expectations has prompted some concern, but for now, slower growth remains the forecast. "If expectations continue on this downward trend, a more severe economic slowdown may be on the horizon," says Lynn Franco, director of the Conference Board's Consumer Research Center.
- by Julia M. Duncan