Independent voices from the TWT Communities
It was the tax cut that nobody noticed two years ago. And it was rarely mentioned in the fight between Congress and the White House last year over the expiring Bush-era tax cuts. But this month, the payroll-tax cut suddenly registered on everybody's radar screen — when it went away.
The holiday shopping season got off to a strong start over the long weekend, with nearly 5 in 6 Americans making an appearance at the malls or visiting retailers online as rising spirits prompted an early hunt for bargains.
U.S. consumers are in an upbeat mood and are preparing to spend more this holiday season than last year's, providing a badly needed boost to the economy. But headwinds from the lingering effects of Superstorm Sandy and the year-end political storm brewing in Washington could put a damper on their shopping spree, analysts say.
It's not making headlines, but this year's unusually mild weather and low home-heating costs substantially offset the pinch from fast-rising gasoline prices and underpinned the revival of consumer spending.
The economy last month offered up no new jobs in celebration of Labor Day and appears in danger of slipping back into recession despite massive efforts by Congress and the Federal Reserve in the past three years to keep it afloat.
A report revealing the first decline in consumer spending since the Great Recession shocked Wall Street investors Tuesday and raised fears that the economy could fall into a double-dip recession.
Within the space of a week, the nation has witnessed worst performances on record of new-home sales, home prices and building — evidence that the housing market has sunk into a double-dip recession that poses a significant drag on the overall economy.
The economy turned an important corner at the end of last year, recouping all the ground lost during the Great Recession and expanding into record territory.
"This is a major deterioration in confidence," he said. "It is hard to find a silver lining,"
"This year's holiday online retail sales are projected to be in the $79 billion ballpark," he said. "This is no longer chump change by any means. And, the bricks are looking to cash in on the clicks."