by David Kranzler
Investment Research Dynamics
“We are not counting on the consumer to spend more,” Chief Executive Terry Lundgren said Wednesday. With saving rates high, wages growing and employment data steady, Macy’s executives were at a loss to explain why consumers weren’t spending in its stores. “We’re, frankly, scratching our heads,” said Chief Financial Officer Karen Hoguet.
The facts to do not fit the assertions above. The savings rate in this country is not “high” and wages are not growing. The Government may be reporting a high savings rate and growing wages, but that’s merely a product of statistical fiction. Note in the graph to the right (click to enlarge) that rate growth in outstanding credit card/revolving credit is accelerating. This stands in direct refutation of the “high savings rate” narrative served up by the propagandists.