Wednesday, October 22, 2008
About the only U.S. economic news this week is coming in anecdotal form or in the raft of layoff announcements, a list that seems to grow every day now.
Existing home sales will be reported on Friday and some will cheer the long-term bottom being carved out in home sales, which is not to be confused with home prices, a statistic that remains in free-fall in many areas.
Naturally, the less well-heeled seem to be bearing the brunt of the pain so far in this recession, as is usually the case when the economy goes south. Bloomberg reports sales on Rodeo Drive continue to boom, though this may change in the months ahead as the surging dollar and plunging commodity prices transform once rich foreigners into just average spenders who are less inclined to do that spending in the U.S.
On Main Street, times are getting very tough, very fast and sales statistics at Wal-Mart again provide insight into just what's going on inside the mind of your average American as detailed in this report in USA Today.
Financial insecurity is forcing Wal-Mart (WMT) shoppers to change buying habits, cut credit card use and live more paycheck-to-paycheck, the CEO of the U.S. division of the world's largest retailer said Tuesday.This will probably get much worse before it gets appreciably better.
Economic pain is leading to what Eduardo Castro-Wright termed "disturbing behaviors" among shoppers over the past few months.
For instance, more families are buying baby formula at the start of the month when they are more likely to have money. In the past, he said, the chain hadn't noticed such surges in formula sales.
A double-digit decline in credit card use at Wal-Mart stores in the second quarter this year sharply contrasts with the first quarter of 2007, when a vibrant economy was resulting in double-digit increases in card use.
"Credit has been declining dramatically," said the Ecuador-born executive who has run Wal-Mart Stores USA for three years. "That decline in credit means people have to make choices about how they spend their hard-earned money."
Many don't have a choice when it comes to their form of payment. "They have maxed out on their credit limits," Castro-Wright said in an interview after a speech to Town Hall Los Angeles, a non-profit that provides a forum for public figures and opinion makers. "Customers are really going through some hard times."
Cosmetic surgeons and those performing other elective procedures that were all rage a few years ago must be watching business slow to a trickle right about now. Really. What woman can afford liposuction and what man (yes, men - circa 2005) can afford breast implants with disposable wealth shriveling up as fast as home prices fall.
This story in the New York Times raises some serious questions about the health of Americans and the health of the health care industry, what has been the one shining light in an otherwise sour economy.
For the first time in at least a decade, the nation’s consumers are trying to get by on fewer prescription drugs. As people around the country respond to financial and economic hard times by juggling the cost of necessities like groceries and housing, drugs are sometimes having to wait.Just what we need - a sick economy and a sick population.
“People are having to choose between gas, meals and medication,” said Dr. James King, the chairman of the American Academy of Family Physicians, a national professional group. He also runs his own family practice in rural Selmer, Tenn.
“I’ve seen patients today who said they stopped taking their Lipitor, their cholesterol-lowering medicine, because they can’t afford it,” Dr. King said one recent morning. “I have patients who have stopped taking their osteoporosis medication.”
On Tuesday, the drug giant Pfizer, which makes Lipitor, the world’s top-selling prescription medicine, said United States sales of that drug were down 13 percent in the third quarter of this year.
Through August of this year, the number of all prescriptions dispensed in the United States was lower than in the first eight months of last year, according to a recent analysis of data from IMS Health, a research firm that tracks prescriptions.
Although other forces are also in play, like safety concerns over some previously popular drugs and the transition of some prescription medications to over-the-counter sales, many doctors and other experts say consumer belt-tightening is a big factor in the prescription downturn.
The trend, if it continues, could have potentially profound implications.