World of Retail by Your Payday Loans Source

Many Americans are using payday loans nowadays, but responsible citizens only use them for necessities. Consumer spending reports show that people are spending less, they have been for months, and that is not likely to change any time soon.

A different outlook

In “The Big Bing Blog” on Fortune Magazine’s Web site, author Stanley Bing writes about the SkyMall catalog in relation to the recession. He is of the opinion that people buying things from said catalog is a sign that the economy will stabilize.

“I still believe that in the end we’re all going to be all right. If people are buying meerkat gang sculpture for their yards and living rooms, can recovery be far behind?”

You can order your very own Harry Potter wand from the SkyMall catalog. (Warning: Wand does not actually contain magic.)

But are people doing that? Bing argues that the SkyMall catalog, and the marketing business in general, makes us think that we actually need things like cigar humidors and slippers with built-in night lights.  I admire Bing’s optimist, and I understand that his blog is meant to be humorous. Still, I can’t help but wonder if Americans are still making frivolous purchases like these.

Cold, hard facts

Statistics indicate that they are not. The Commerce Department has released its official report on just how dismal holiday sales were this season. Wall Street had predicted that the decline was about 1.2 percent, but final  figures show that sales fell 2.7 percent.

Before you go thinking that maybe Americans did their holiday shopping early this year: It was the sixth straight month of decline. I’m no financial guru, but it seems to me that if people were going to be making frivolous purchases, they would have done it for the holidays, even if they had to take out payday loans to do it.

Aftershocks

In the wake of these reports, some major retailers are announcing big changes. California department store chain Gottschalks is up for sale, and it has filed for Chapter 11 bankruptcy.

Famous luxury retailer Neiman Marcus Group Inc. says it is going to cut 375 jobs. Macy’s department store is closing 11 stores, which will affect 960 employees. So between those two companies, I can safely assume that at least 1,335 people out there will be even less likely to be making discretionary purchases.

Job loss leads to job loss

So, because consumers aren’t spending enough on retail, employees from retail store are out of a job. If (when) those employees go on unemployment, their incomes will be slashed by more than 30 percent, leading to even less spending and more … well, you get the picture.

Thus, it comes as no surprise to me that Federal Reserve says this low-spending trend is continuing and worsening this month. An AP reporter says “job cuts, sinking home values and cracked nest eggs have made American consumers wary of spending.”

Ahem. I think that by “wary of spending” she means “unable to spend.”

A slow fix

The only way I can see to change this trend is for employers to start hiring instead of firing. American consumers aren’t going to suddenly start spending money they don’t have, especially considering the credit crunch going on.

So Obama has the right idea by including programs that create jobs in his American Recovery and Reinvestment Plan. You see, the government will spend money it doesn’t have to hire people to work on roads and bridges and alternative energy sources. Then perhaps those Americans will start ordering antique-style gumball machines from the SkyMall catalog and all will be well again. Perhaps.

The future of the American way

Are we changed forever? Americans, especially those who have lost their homes, have learned some hard lessons in the past year. When this is all straightened out, will Americans really go back to maxing out their credit cards at luxury department stores?

No one can tell the future, but it’s always fun to make predictions. So, what do you think? Will Americans start using payday loans because they absolutely must have that UV-ray-blocking beach canopy right now?