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Spend big, pinch pennies: New American consumer

Jeff Brown, Special to CNBC.com
Thursday, 5 Sep 2013 | 3:23 PM ET
A shopper carries a purchase from Macy's along the Magnificent Mile shopping district in Chicago, Illinois.
Getty Images
A shopper carries a purchase from Macy's along the Magnificent Mile shopping district in Chicago, Illinois.

Recapping the day's news and newsmakers through the lens of CNBC.

Consumers choose homes and cars over routine items

Notes:

Okay, retail sales were up in today's reports, beating expectations, but here's the rub: to do that, retailers had to offer deep discounts in August. That doesn't bode well for profit margins. Among the problems: consumers seem to be ramping up purchases of big-ticket items like homes and cars, but to do that are skimping on clothes and other retail items. At Costco, for instance, same-store sales rose 4 percent, propelled by gains for the most inexpensive items like health and beauty aids, while more expensive "typical" buys like electronics were weak.

Quote:

"That was emblematic of just the lack of demand for back-to-school."— Ken Perkins, president of Retail Metrics, on discounting efforts by retailers.

Job seekers speak with an employment recruiter in Brooklyn, NY
Getty Images
Job seekers speak with an employment recruiter in Brooklyn, NY

Jobs data bipolarity

Notes:

Optimist or pessimist, you'll find support in the new jobs data. Unemployment claims continued to decline in August, falling 9,000 to 323,000. That brought the four-week moving average, a better gauge of trends, to the lowest level since October 2007. All well and good, but plans for layoffs surged in August to the highest level in six months. Layoffs announced last month, at 50,462, were up nearly 34 percent from July.

Quotes:

"Steady as she goes...right in the strike zone."—Mark Zandi, economist at Moody's Analytics

"Heavy job cuts in the industrial goods sector are never a good thing, as they can be indicative of widening cracks in the economy's foundation."—John A. Challenger, CEO of Challenger, Gray & Christmas.


Joy Global mining machinery.
Source: Joy Global
Joy Global mining machinery.

A blow-out economic indicator

Notes:

Retail performance may be a tad worrisome, but the service sector is putting up some impressive numbers. August growth was the fastest since December 2005. Unfortunately, a separate report showed that new orders for factory goods dipped in July, though by less than analysts had expected.

Quote:

"ISM non-manufacturing was a blow-out number at 58.6."—CNBC's Rick Santelli

Bill Ackman
David Grogan | CNBC
Bill Ackman

Hedge funds' irrational appeal

Notes:

What's the big appeal of hedge funds? Presumably, it has something to do with getting in on opportunities barred to the ordinary Joe. That, or something like it, must explain the nearly 7.5 percent growth, to $1.57 trillion, of assets at the biggest funds. The industry as a whole hasn't performed all that well this year, with returns through July of just 4.05 percent, versus 19.63 percent for the S&P 500.

Quote:

"Pensions, endowments and other investors are adding to the $2.7 trillion hedge fund industry despite mediocre performance so far this year, at least compared to stocks."—CNBC.com's Lawrence Delevingne

Source: Douglas Elliman Real Estate

The one percent's bucket list

Notes:

What's the newest must-have for the well heeled? An electric sports car? A launch into space? Try this: a piece of land in the Hamptons that's one foot wide and 1,800 feet long, sold recently to a Manhattan financier for $120,000. It won't be the world's skinniest vineyard; it's a right of way, a path guaranteeing beach access.

Since you missed your chance at that, how about this: a 26-day around-the-world tour at a cool $4,000 a day. The $105,000 tour by private jet includes feasts in the Amazon, a spa visit in Samoa and wildlife treks in Africa—and a lot of bragging rights when you get home. In fact, a number of firms offer trips of this sort, typically for about 50 travelers per tour, with all the details covered. Many are sellouts.

Quote:

"For the wealthy that don't have much time, this is a sort of bucket list."—CNBC's Robert Frank

—By Jeff Brown, Special to CNBC.com

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