Consumer spending habits “forever” changed?
14 August 2009 by Christopher SuleskeKristin BENTZ (by way of Peter GORENSTEIN) argues that the recent contraction of consumer spending is a permanent phenomenon:
Someone who wasn’t surprised by the weak data is former Wall Street retail analyst Kristin Bentz. “It’s going to take this consumer a long time to recover,” she says. The author of the retail focused investing blog, The Talented Blonde, believes the recession has changed the consumer’s behavior forever. “I think that Americans are willing to do with less and aren’t going to be so easily seduced by retail.”
To be sure, consumer spending is way down – which is a serious issue for this economy, largely driven by consumer spending – but to argue this is permanent? It reminds me of the talk in the late 90s of the permanent end of the business cycle. That argument went extinct in 2000-01.