An article today titled ‘Wall Street sees shoppers as key to rally’s future’ says that “On Wall Street, the average shopper can trump a Federal Reserve policy maker”, and that “With other parts of the economy showing signs of improvement, the question of when a recovery will occur and how strong it will be lies with consumers”.

Frankly, this having been my constant refrain on this Blog for many months now, the only interesting thing I see in this is why so little has been written in since the beginning of the year on the importance of U.S. consumer spending to U.S. economic growth and health.  The article says “reports last week showing weaker-than-expected retail sales and flagging consumer confidence overshadowed an upbeat view of the economy from the Federal Reserve” and “This (coming) week, the consumer is in focus again as a stream of retailers report second-quarter earnings. Wall Street will want to know if retail companies, like businesses in other industries, made money primarily because of cost-cutting rather than from improved revenue or sales”.  This suggests Wall Street focuses on the consumer only when news is about to be released.  I simply can’t believe that.  My guess is that it is the article writers and reporters who think from a myopic 100 foot level and not from a 10,000 foot level when reporting on news just released or about to be released.  The economists and smart Wall and Bay Streeters have to know the importance of the U.S. consumer to U.S. economic health – just as the U.S. Administration must know that in spades.  Collectively, they just may not want to emphasize it by talking frequently about it.  That said, the referenced article also says “Friday’s consumer sentiment report was a jolt for traders about exactly how uncomfortable consumers still are with their finances and the state of the economy”, so perhaps I am wrong in my assumption as to Wall Street and Bay Street focusing on the importance of the U.S. Consumer to recovery.  If I am wrong in my Wall/Bay Streeter assumption I don’t think that augers well either for investors who rely solely on their investment advisors and don’t ‘think for themselves’.

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