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The U.S. economy grew just 1.9 percent in the first quarter and is expected to
show little improvement but…the ratio of household liquid assets to liabilities is now the highest since Q1 2002. [That’s great, but exactly what does that really mean?] Words: 225
So conveys Mamta Badkar (www.businessinsider.com) in edited excerpts from his original article*
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Badkar goes on to say, in part:
Gluskin Sheff economist David Rosenberg writes that while the savings rate is climbing, as policy uncertainty continues and the job outlook remains clouded, personal consumption expenditure is expected to “barely come in much better than a 1% annual rate. That is stall speed” he says, noting that:
- 70% of retailers missed their sales target in June,
- demand for retail space is weak, and
- the vacancy rate at strip centers has barely improved and that, in fact,
- the industries that are thriving are the “do it yourselfers” like repair shops and dollar chains.
Rosenberg concludes that it would appear that U.S. consumers are antsy even if household balance sheets are improving.
Take Note:
However, there may be a silver lining. Deutsche Bank chief economist Joseph LaVorgna explains that the higher stock prices and lower liabilities are behind the improved ratio of household liquid assets to liabilities [see chart below], and with stock prices effectively flat in the second quarter, another drop in household liabilities should push up the ratio [even further]….
*http://www.businessinsider.com/deutsche-bank-household-balance-sheet-2012-7#ixzz20ASvm0Hv (To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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