Wealth Manager is delighted to introduce a new blog, Portfolio Diagnostician, in which Ben Warwick will post about investment strategies, markets and the economy.
A good indicator on the state of the consumer is the sales of Claire's, a chain of stores that sell value-priced jewelry and other knickknacks in its 2,000 locations.
Not only are the stores geographically diverse enough to give us a good read on domestic spending, but their low price points (most stuff is under $20) can tell us how willing consumers are to part with their pocket change. Can't buy a $60 pair of designer jeans? How about a $7 pair of earrings?
A few weeks ago, Claire's reported a 10% drop in same store sales. There's some obvious trepidation out there among buyers, who would rather save than spend. But instead of money-market accounts (and their zero yields), it seems that most folks prefer to stash their savings in the stock and bond markets. Saver inflows are propping up the stock market, even as the evidence mounts that people just aren't into buying stuff; indeed, this recent bout of frugality might change consumption patterns for years.
