Consumer Spending Growth Sputters

As the holiday shopping season (more or less) officially kicks off today, the U.S. retail industry is left wondering whether it will also reignite consumer spending, which has come to a slowdown.

The Wall Street Journal reported this week that, last month, rising wages led to the highest personal savings rate in America in almost three years. While money was coming in for a lot of U.S. consumers last month, those folks weren’t putting it back out into the economy.

The outlet shares a note that Michelle Girard, an economist at RBS Securities, wrote to clients: “Consumers have the wherewithal to spend; they just don’t want to.”

WSJ offers specific numbers in that regard: While personal income in the U.S. increased by 0.4 percent in October, consumption only rose by 0.1 percent — the same slow rate of growth that was seen in September. Meanwhile, the personal saving rate in the country was 5.6 percent at $761.9 billion — both of which, WSJ notes, were the highest figures seen since Dec. 2012.

Consumer’s interest in spending remained relatively low at the end of the current month, as the University of Michigan’s Consumer Sentiment Index — measuring consumer confidence in the economy — for November fell to 91.3 (having been at 93.1 in the middle of the month).

All told, retailers are looking for explanations as to why consumers are tightly holding onto their disposable income and what might drive spending.

“We’ve certainly spent a lot of time here trying to understand the consumer, and they really are [angry] right now — it’s a bit of a mystery,” Sandra Cochran, president and CEO of Cracker Barrel Old Country Store Inc., told investors this week.

“It appears as though many consumers are angry,” she added. “They all seem to be — not necessarily at the same thing. Lots of concern about global issues, concern about layoffs and so on. So, I would say that right now the consumer is a mystery.”