Friday, May 11, 2007

Weak retail maybe its just "global warming"?

There is a lot made the recent slow down in retail spending, folks did you forget it rained for 7 straight days causing flooding throughout the north east ? In the short run the weather and higher gas prices can affect retails sales. I am also sure that States like New Jersey with their continued tax increases put a damper on retail cheer as well. Yes folks Taxes raise costs, increased cost slow demand (econ 101). My bet would be that lower retail sales is just a seasonal issue and not the beginning of something more sinister like the “R” word (recession). However, gas prices fluctuate up and down ,but taxes have a tendency to only move higher ,so if we were to see sustained tax increases for some time it would have very negative consequences on economic growth.The weather is and has always been the weather and as they say the, "wind blows all over the place" so from time to time mother nature will let you know whos still boss. The weak housing market is also considered a culprit of weaker retail sales, again did I mention increases in property taxes? The jury is still out as to the effect of a major down turn in housing ,my feeling is that the those that participated in excesses are going to feel the most pain and that this wont spark a national malise.

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