So what is happening out there in the real world when it is reported that consumer spending tightens. The retailers are expecting a less than normal Christmas season because wages are flat and credit is tight. This will all lead to a consumer who's consumer spending tightens.
Since the recovery is week the consumers are in no position to spend there way out of the recession. The Commerce Department reported that personal incomes were stagnant in September. While unemployment is still rising.
Consumer spending accounts for 70 percent of the total economic activity has dropped 0.5 percent the first decline in 5 months. The bright spot in the economy is that gross domestic product grew 3.5 percent from July to September.
Analysts are saying that the consumer are showing there fear of the economy by their spending habits and and they tightens the grip on their money.