Feeds: 
symbol identifies content for paid subscribers only.
The Post Still Has Not Heard About the Housing Bubble
That is the only conclusion that readers can draw from an article about the October plunge in retail sales. The article notes that the falloff was one of the sharpest on record. It points to job loss and difficulties and obtaining credit as culprits.
While these were both factors, people who follow the economy would note that homeowners have lost more than $5 trillion in real housing wealth since 2006, close to $70,000 per homeowner. As a result, tens of millions of homeowners have little or no equity in their home. This reduce their consumption both because they have more difficulty obtaining credit and also because they feel more need to save.
This sort of falloff in consumption was entirely predictable outcome of the housing crash.
--Dean Baker
COMMENTS (2)
A local bank here in Bubble Country reported that it had plenty of money to lend, but that there weren't many qualified borrowers out there. Small business is particularly hard-hit, as much of the gift shoppe industry was really dependent on people making entirely discretionary purchases. Well, people aren't making those purchases now, and unfortunately, a lot of these businesses aren't viable and are going to fail. Lending them more money isn't going to help.
What we really need to look at, though, is what's going to happen to all of the retail clerks who, always precarious because of low wages, are going to be laid off and for whom there are no jobs.
Posted by: PeonInChief | November 15, 2008 12:37 PM
Speaking as a "retail clerk" (really more of a stock person) at a major chain book store, I can confirm that despite the Christmas season arriving, there are major cutbacks in stock. Pretty much all the warehouses send us these days are bargain books and laydowns (major releases). I'm actually more concerned about what this is going to do to independent book publishers and authors than I am with how it will affect stores and employees. I know that South End Press is in severe distress because our stores sent back most of their books that we had previously been stocking.
Posted by: Ryan H | November 15, 2008 3:11 PM