American consumers are shocked and confused and reluctant to spend by the constant torrent of complex and often conflicting data on the state of the economy. The University of Michigan and Reuters conducted an early reading of consumer sentiment which jumped to the highest level in more than two years. Retail sales dipped 1.2% in May, which brought an end to a seven-month streak of gains.
David Wyss, Chief Economist for Standard & Poor's, said, “We're all schizophrenic. People remain nervous about borrowing money and about spending money, and they darn well ought to”.
According to the Commerce Department, clothing stores witnessed a 1.3% decline, while sales at department stores fell 1.8% in May, compared with the previous month. Sales in sporting goods and hobby stores escalated to
0.4%. Electronics as well as home appliance stores surged 0.6%.
There was a 3.3% decline in spending at gas stations due to a fall in fuel prices. Matt Shay, Chief Executive of the National Retail Federation, a trade group, revealed that uncertainty still exists in the economy and May retail sale results are a reminder of that.
According to a preliminary June survey, released Friday by the University of Michigan, consumers feel better about the economy than they have since January 2008.