The Financial Times reports about the decline in periodic retail sales in the U.S. presumably to the impacts of the housing market turmoil.
As prices weakened, the lending practice has become far more restrictive, reflecting the experience of sub-prime mortgages. In fact, this particular shock outbursted the sell-off in the capital markets which heated the situation close to panic, leading to price corrections respectively. Despite the recent news about the possible interest rate cuts by the FED, borrowing conditions have become tighter. In turn, immediate market sell-offs sprang out a highlighted price reductions and a downslide of stocks and bonds.
In effective terms, the indicators in the U.S. financial market envisage a high degree of uncertainty in the future, especially due to the aggresive assertions of the interest rate cutting and due to housing and sub-prime mortgage slid. I believe the confidence index will play the major role in regaining the positive outlook of financial markets which crucially determines the dynamics of household spending particularly on retail consumption.