Are consumers running out of steam--either because they are running out of room on their plastic or perhaps they've used up most of the cash pulled out of home equity? Maybe. I've felt for some time that there had to be a big wall along the way into which people would slam very heard. Well, with oil prices rising, household savings at zero and people hitting the limits of a phantom wealth from rising real estate values (no one creates anything new with the rapid rise in real estate values, just a lot of paper wealth), retail sales slowed in March.
And where the slump has come is particularly interesting. According to today's Wall Street Journal, "Excluding sales of autos and parts, which are volatile, and gasoline, which reflects rising pump prices, sales declined 0.1%, the first such drop in almost a year. Sales of clothing, electronics and furniture, and sales in general at department stores and restaurants all fell." If people aren't buying more stuff, it will get ugly fast.
And the International Monetary Fund is predicting a slowing in world economic growth, to 4.3% this year from 5.1% last year, and that growth in the U.S will drop to 3.6% from 4.4%. These are connected--the world is overly dependent on Americans continuing to keep shopping.
I dunno. I'd be nervous.