Profit Confidential Cautions: U.S. Retailers in Trouble as Economic Indicators Plummet - WMBB News 13 - The Panhandle's News Leader

Profit Confidential Cautions: U.S. Retailers in Trouble as Economic Indicators Plummet

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Profit Confidential warns that U.S. retailers are in danger as leading economic indicators, including consumer confidence and spending, decline.

New York, NY, United States – June 9, 2014 /MarketersMedia/ –

Profit Confidential (www.ProfitConfidential.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is warning that U.S. retailers are facing tough economic headwinds as consumer confidence and consumer spending plummet.

“In the first quarter of 2014, Retail Metrics, a retail industry research firm, found U.S. retailers missed their corporate earnings estimates by the most since the year 2000,” says economist and lead contributor Michael Lombardi.

Lombardi explains that consumer spending only increases when consumer confidence is rising. Unfortunately, with the state of the U.S. economy, that confidence is plummeting. Most recently, the Thomson Reuters/University of Michigan’s consumer sentiment index declined three percent month-over-month from 84.1 in April to 81.8 in May. (Source: “U.S. consumer sentiment slips in May, focus on wages,” Reuters web site, May 16, 2014; http://www.reuters.com/article/2014/05/16/us-usa-economy-consumersentiment-idUSBREA4F0E820140516.)

According to Lombardi, consumer confidence is just one leading indicator that suggests consumer spending will continue to negatively impact the U.S. economy; the unemployment situation and wages suggest the same.

“While stocks, in general, have held their own this year, the S&P 500 is up around five percent so far this year, while the stock prices of many major retail stores have fallen sharply,” he adds. “In addition, the Dow Jones U.S. General Retailers Index has lost seven percent of its value since the beginning of 2014.”

While many pointed to the bad weather as the impetus for weak retail results in the first quarter, more of the blame can be put on weak underlying economic indicators. During the first quarter of 2014, the U.S. economy contracted one percent, marking the first time the U.S. economy has experienced an “official” contraction since the first quarter of 2011. The reason is simple, Lombardi notes: consumers are tapped out and their incomes are not keeping up with inflation.

“All the U.S. needs is to experience one more quarter of ‘unexpected’ contraction in the gross domestic product, and the country will be back in a recession. This can’t help but put more of a damper on consumer confidence and consumer spending,” Lombardi concludes. “When investors realize the bullish stock market is being supported by weak fundamentals, the market will start to retrace. And when it does, retail stocks will be one of the hardest hit sectors.”

For more information on Profit Confidential, visit www.ProfitConfidential.com.

Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.LombardiPublishing.com.

For more information about us, please visit http://www.profitconfidential.com/

Contact Info:
Name: Wendy Potter
Email: press@lombardipublishing.com
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022
Organization: Lombardi Publishing Corporation

Source: http://marketersmedia.com/profit-confidential-cautions-u-s-retailers-in-trouble-as-economic-indicators-plummet/50857

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