U.S. Outlook: Consumers stay home in January
Bad weather, lackluster income growth, and reduced personal savings led to a January consumer spending strike.
- January retail slump is just a temporary pause.
- We lower Q1 GDP estimate to 1.9% from 2.1% on weak retail sales.
- We also lower 2014 GDP estimate to 2.8% from 3%.
- Consumers are getting less shy about taking on new revolving debt.
- Small businesses appear unfazed by near-term softness.