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California Consumers “Living on Fumes”
The humor of this mixed metaphor aside, the quote from Chris Thornberg of Beacon Economics points to a serious weakness in California’s economic outlook. Taken from Dale Kasler’s Sacramento Bee article today entitled Housing Clouds Economy, both writers question the strength of our job market and consumer spending set against the backdrop of falling real estate equity.
So far, economists seem to feel the real estate problem will remained contained. Seeping out from the cracks in this confidence however are some signs that the problem will spread. With credit use skyrocketing in the first half of 2007 and home equity evaporating, how long can the consumer continue to prop up the economy?
August 12th, 2007 at 8:37 am
Looks like the consumer is faltering. With credit card use soaring and gas prices climbing, the consumer has to run out of steam soon. I personally don’t know anyone who isn’t being more cautious about spending now that their home equity is gone.
And with the last couple of week’s events, isn’t everybody a little freaked out?
August 13th, 2007 at 2:21 pm
Check out the July retail sales report William. The consumer is alive and well and buying. Unemployment is low, new jobs are being created at a good clip. Not everyone makes their living in real estate.
Don’t freak out yourself, and those around you won’t panic.