The retail sales are reported to be down in the real terms for five months now. With the current free fall in the consumption pattern, do not be surprised if the US domestic growth shows poor figure in the fourth quarter of the current year.

The economic recession has had a cascading effect on almost all the sectors. The job cuts, bonus cuts and the constant nightmare of the pink slips have made the consumers extremely conscious of their spending habits. This has initiated the buyers to spend within their means, a trend unheard of during the former years before the credit crunch.

The debt-to-disposable- income ratio has increased from 70 percent in the 1990s to 140 percent in 2008. Majority of the consumers in the US markets are under a heavy burden of debt.

Another reason for the change in the consumption pattern is due to the fall in the real estate sector as well. The value of the houses has been reported to soon reach the depreciation of 30 percent. Also, a large chunk of the population under the scanner is the households with the mortgage.

The bottom line is that the US customers are not only shopped out but also debt-burdened. The effects of all these have negatively affected the spending habits and definitely not helped the previously booming retail sector.

Via: Forbes