Computer seller CDW Corp. (CDWC) on Wednesday reported lower-than-expected third-quarter revenue on a decline in sales to business customers, sending its shares down nearly 3 percent.The Web-based retailer, which targets businesses and government agencies, said net sales rose 4.1 percent to $1.74 billion. That wasn’t enough to satisfy analysts, whose average forecast was $1.76 billion, according to Reuters Estimates.
Corporate sales fell 2.5 percent to $1.09 billion.
When added to IBM’s (IBM) mediocre overall growth of 5% reported last night, it seems pretty clear that business spending isn’t picking up. Unfortunately, the consumer finally looks to be running out of steam. Motorola’s (MOT) sales warning shows that cell phone purchases may be tailing off. Ad spending (strongly tied to consumer spending) is weak almost across the board. The job market and housing markets are clearly slowing.
Right now it is government spending that is keeping the economy growing as a whole, as evidenced both by CDW’s report and the recent durable goods orders. The problem is, very few people think government spending is the most efficient way to generate healthy long-term growth.