Are Consumers Ready to Spend Again?; Retailers Try to Decipher Mixed Signals as Economy Picks Up, but Shoppers Are Still Sheepish
Summer brought companies some hopeful signs of economic recovery. This fall, the optimism will be put to the test.</br></br>That's because it is unclear whether consumers--the engine behind more than two-thirds of the American economy--are ready to resume spending at significant levels.</br></br>Signals are mixed. After years of lackluster growth, corporate revenues for large companies grew more rapidly in the second quarter, and company guidance suggests that trend will continue in the second half of the year. The Conference Board said consumer confidence picked up in August.</br></br>Employment continued to tick upward. Gross domestic product jumped in the second quarter as businesses and consumers made up for the first quarter's lousy weather. Economists are predicting growth at a 3% rate for the second half, and 2% growth for the full year.</br></br>Still, the retail industry, tied more closely to consumer spending than any other, is struggling. In August, the Commerce Department said U.S. retail spending was flat in July. And household spending declined by 0.1% in July, the first drop in personal spending since January.