Are Households Saving Their Pump Savings?

By: Paul Kasriel | Tue, Nov 28, 2006
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The fall in gasoline prices was supposed to provide some high-octane fuel to retail sales. But for two months in a row, nominal retail sales contracted, suggesting that households were not spending all of their savings at the gas pump of late on other items. But, of course, the (horseless?) carriage trade's spending might not be heavily affected by lower gasoline prices inasmuch this item represents relatively little of its total spending on goods. But how do you explain two consecutive months of minuscule Wal-Mart same-store sales? Year-over-year comps for Wal-Mart in October and November were 0.5% and minus 0.1%, respectively. The November performance for Wal-Mart was the weakest in 10 years. Wal-Mart's customer base encompasses those for whom gasoline is a relatively large component of their total purchases of goods. Could it be that the masses are saving their pump savings?



Paul Kasriel

Author: Paul Kasriel

Paul L. Kasriel
Director of Economic Research
The Northern Trust Company
Economic Research Department
Positive Economic Commentary
"The economics of what is, rather than what you might like it to be."
50 South LaSalle Street, Chicago, Illinois 60675

Paul Kasriel

Paul joined the economic research unit of The Northern Trust Company in 1986 as Vice President and Economist, being named Senior Vice President and Director of Economic Research in 2000. His economic and interest rate forecasts are used both internally and by clients. The accuracy of the Economic Research Department's forecasts has consistently been highly-ranked in the Blue Chip survey of about 50 forecasters over the years. To that point, Paul received the prestigious 2006 Lawrence R. Klein Award for having the most accurate economic forecast among the Blue Chip survey participants for the years 2002 through 2005. The accuracy of Paul's 2008 economic forecast was ranked in the top five of The Wall Street Journal survey panel of economists. In January 2009, The Wall Street Journal and Forbes cited Paul as one of the few who identified early on the formation of the housing bubble and foresaw the economic and financial market havoc that would ensue after the bubble inevitably burst. Through written commentaries containing his straightforward and often nonconsensus analysis of economic and financial market issues, Paul has developed a loyal following in the financial community. The Northern's economic website was listed as one of the top ten most interesting by The Wall Street Journal. Paul is the co-author of a book entitled Seven Indicators That Move Markets.

Paul began his career as a research economist at the Federal Reserve Bank of Chicago. He has taught courses in finance at the DePaul University Kellstadt Graduate School of Business and at the Northwestern University Kellogg Graduate School of Management. Paul serves on the Economic Advisory Committee of the American Bankers Association.

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