CHARLOTTE, N.C. — Investors will get some guidance about the economy this week from data issued not by the government, but by big retailers in the form of third-quarter earnings reports.
The financial markets are still trying to get a sense of whether consumers, while worried about unemployment, are nonetheless willing to spend, especially as the holiday season approaches. Retailers’ earnings reports and outlooks for the future should give them clues about the economic recovery. Investors will also get a first look at on consumer sentiment during November.
“For this economy to really come back, we have to depend on the consumer,” said Yu-Dee Chang, principal of ACE Investment Strategists LLC.
The greatest obstacle to increased consumer spending is unemployment. And it’s not only unemployed consumers who aren’t spending, it’s also those who are afraid of losing their jobs.
Investors did find some positives in the Labor Department’s largely bleak October employment report Friday. While the government said unemployment has risen above 10 percent for the first time since 1983, the market managed a modest advance as investors theorized that the weak labor market would mean the Federal Reserve will keep interest rates low for some time.
A hesitant consumer is particularly troubling heading into the holiday shopping season.
Analysts say, however, that some retailers may be the beneficiaries of consumers’ continuing caution, which has made many of them migrate to the lowest-priced stores.
“People will still spend,” Harrison said. “They will just adjust where they spend.”
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