As if the lowest consumer sentiment in three decades wasn’t enough, the largest retailer in the world provides yet more evidence that the consumer in the United States is being unabatedly destroyed:
…company comments about consumer spending showed the split between upper-income consumers who have jobs and are little affected by rising costs for food and other essentials, and lower-income shoppers who are struggling with stubbornly high unemployment and rising costs.
“This is exactly what we continue to see quarter after quarter. There’s just significant bifurcation here,” Edward Jones retail analyst Matt Arnold said.
Wal-Mart said same-store sales at its U.S. discount stores, by far its largest business, fell 0.9 percent in the second quarter, the ninth straight quarterly decline at domestic stores open at least a year.
“They’re trading down to stretch their budgets, buying a lower-priced brand of detergent, moving from branded canned goods to private label, and purchasing half gallons of milk instead of gallons,” Wal-Mart Chief Executive Mike Duke said in a recorded message.
Also, more shoppers are relying on government aid to help pay for food and other necessities, Walmart U.S. CEO Bill Simon said on the call.
When the retailer selling the cheapest goods in the world manufactured by slave labor can’t boost sales growth, then you know there’s a problem. If anything, consumers should be shopping at Walmart in droves, putting competitors out of business. Even if consumers wanted to buy more (non-essential) goods, they couldn’t.
Millions of jobs lost. Millions more left to lose. Credit for everything except college tuition is almost nonexistent. Wages and benefits are deteriorating. 401(k)’s and savings accounts have been tapped. The value of homes, the leading investment product of America’s middle class, have been wiped out. The country’s gross domestic product, the key measure of economic growth, has collapsed.
We are on the brink of the next phase of this crisis, when the last of the easy money (for Main Street) runs out, is going to be nothing short of financial Armageddon, because the government will have no ammunition to counteract the next market collapse.