The American consumer is the globe's preeminent patron. It is the most discerning shopper with the greatest variety of choices on which to spend money. Globally speaking, the American consumer is wealthy, wasteful and wanton in its desires. But it's tired. It's all but tapped out, accountable for less than half the economic growth enjoyed by the U.S. in the second quarter.
Meantime, from global brands to 401(k) investments, China's consumer class has become increasingly important. Chinese consumers have been responsible for more than half the economic growth this year in their country, outstripping the investments businesses have made to expand and restock plus the money to build homes and condominiums. Attention Chinese shoppers, welcome to the top of the economic priorities.
Investors will get updates on both shopping stratums in the new week. American retail sales for July are due to be released Wednesday. China's June retail sales come in a day earlier. The retail money remains much greater in the U.S. than in China and a much greater portion of the U.S. economy is accountable to consumers than China's government spending powered economy. Still, China's data could be more compelling to a stock market wrestling with the recent return of volatility.
Until this year Chi
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na's monthly retail sales were jumping by 13 percent (and usually more). This year the growth has slowed over worries about the government curtailing consumer borrowing, fast rising housing costs and a decelerating rate as the consumer base continues expanding.
American shoppers are expected to pick up their spending habits thanks to an improving job market, though there hasn't been evidence yet employment confidence has led to spending sprees.
The economy of today may rest on the wallets of American consumers. Tomorrow's global consumer growth will be bought in China.
Tom Hudson, financial journalist, hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter HudsonsView.