Given the pile of carcasses left behind by other pundits who have attempted to call an end to the consumer’s willingness to keep spending, we have been reluctant to make such forecasts in the past. However, as the evidence mounts we increasingly believe that this holiday season will amount to something of a last hurrah - for now, anyway.
The latest news is Best Buy’s (NYSE:BBY) profitless prosperity. This shows that the consumer is still pulling out the pocketbook - but only when there is a good deal. With home theater equipment now being offered at low sale prices and with no-interest until 2010 credit offers, it is little wonder profits are getting tight. (Although the consumers should consider that with LCD prices falling 35% per year, zero percent interest is still usurious in real terms!)
- As positive a spin as many try to put on it, job growth looks like it is weakening to us.
- Housing prices continue to decline.
- Gas prices are still higher than they were a year ago, and could be having a cumulative impact.
Granted, this is all still anecdotal. But the anecdotes are piling up.