WASHINGTON, Aug. 29 (UPI) -- U.S. consumers spent more in July than in June, but retailers say economic pressures have them keeping a watchful eye on their pocketbooks.
"Customers remain under continued pressure," William Simon, president of Walmart U.S., said, which means many are avoiding standard department stores and heading toward discount chains and others are steering away from national brands to buy store brands or generic products.
"Food inflation has replaced gasoline price as the most important household-expense concern," Simon said.
At retail giant Target, "wealthy households continue to be the most optimistic," said Kathy Tesija, the firm's chief merchandising officer, said in a conference call last week.
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That meant "20 percent of households with the highest incomes are shopping more often and spending more," she said.
Everyone else? "Spending less," Tesija said.
Data shows consumers borrowing less, as well.
Borrowing for credit cards and mortgage loans has fallen from about 90 percent of the gross domestic product to about 85 percent since the recent recession, the Post said.
Prior to 2000, however, borrowing was at 65 percent of the GDP, indicating that it may take a considerable drop in borrowing for several years for consumers to regain their confidence again.
The Commerce Department said Monday consumer spending rose 0.8 percent June to July, but that included some pent-up demand as private consumption dropped 0.1 percent from May to June.
Incomes rose 0.3 percent month-to-month, but unemployment has remained stubbornly high with millions of Americans out of work long-term.
What could be replacing confidence?
"Fear is driving things," said Linda Bailey, a Walmart customer in Northern Virginia.
"We really don't know what's going to happen, do we?"
