WHY ARE RETAIL SALES STRONG DESPITE TIGHTENING CREDIT CONDITIONS AND A CHANGE IN CONSUMER ATTITUDES?

It could be any number of things -

1. Low retail forecasts that don't leave much room for surprise to the downside
2. Heavily discounted merchandise
3. Consumer perceived stabilization in unemployment

Your guess is as good as anybodies!

(If this is for your homework, I will throw so much monkey shit at you that you'll look like tub girl.)

super heavy discounting

I believe I saw a survey that said that most people feel more confident about their own situation than the situation at large. That might have something to do with it.

STOP YELLING

positive outlook compared to last year future > past

I think it has to do with heavy discounts matched with overly pessimistic estimates. Also, there is a lot of personal de-leveraging going on in the form of not paying bills which ruins credit, but also frees up cash in the short term. Consumer confidence came in a little higher than expected also.

Do you think that people are really consuming on a discretionary basis while deferring their bill payments on a wide enough scale to matter on a macroeconomic level? I don't want to believe that.

Thanks guys.. No it definitely wasnt for my homework but I've a friend who's had had this interview question lately for cap mkt internship in a big bb..

I

I think it's a mix of overly pessimistic expectations as well as comps to 2008 as well as a general outllok that the world isn't coming to an end just yet.