Weakening Indicators
Jul 2nd, 2008 | By Dave Gonigam | Category: Stock Market InvestingYes, the sales numbers from Detroit are pitiful. But as usual, I look elsewhere for signs of a deteriorating economy.
Starbucks (NASDAQ:SBUX) chief Howard Schultz wasn’t kidding when he said “the current economic environment is the weakest in our company’s history.” Now come the consequences — 600 locations to close soon.
And that’s not all that’s looking ugly. The latest reading of the iPhone index reveals that, as Marketwatch diplomatically states it, “A slowdown in the U.S. economy appears to have spurred consumers to delay purchases of new phones, especially high-end models. It remains to be seen whether the newer iPhone can buck that trend.”
AT&T (NYSE:T) has formally revealed its pricing for the new and improved iPhone… and at $199 for an 8GB model, it’s relatively affordable. Until you tack on the two-year service contract. At a minimum $70 a month. Not including text messages.
AT&T is promising, at an unspecified future date, an iPhone that’s not tethered to a service contract, but that’ll be $599 up front, thank you very much. And you’re still forking over $70 a month. Um, before taxes, fees, and other charges that probably bring you closer to $85.
Of course, it’s not Americans alone who are tightening their belts. Italians are cutting back on their beloved pizza. Only 9% of Italians identify it as their favorite food, down from 14% just two years ago. By contrast, pasta consumption is up, despite rising wheat prices. We’ve already identified U.S. consumers eating “less meat, more pasta” — and that was months before gas hit $4.
Source: Weakening Indicators
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