Sluggish sales at major retailers paint a grim picture of an uneven economic recovery that has low- and moderate-income households reluctant to buy anything beyond the bare necessities.
Three years out from the worst recession in generations, many Americans are still contending with unemployment or stagnant wages that limit their disposable income. This group has also been disproportionately squeezed by the restoration of the payroll tax and rising gas prices, economists say.
Against this backdrop, Wal-Mart, the world’s largest retailer, lowered its profit outlook for the rest of the year after reporting weak second-quarter earnings Thursday. [...]
“This has been a tough recovery for folks who are their prime customer base,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a liberal think tank. “If you look at statistics on whose paychecks are going up, you’ll see that it’s clearly an uneven recovery. In that sense, lower-end retailers are going to have a tougher time.”
Average weekly earnings for full-time wage and salary workers rose barely half a percentage point in the second quarter, according to the Bureau of Labor Statistics. Data released Thursday by the bureau show that weekly earnings tumbled 0.5 percent from June to July.
“Too many companies are following Wal-Mart’s example by failing to invest in their employees, underpaying and under-staffing. As a result, we’re seeing slow wage growth in the economy as a whole,” said Amy Traub, a senior policy analyst at Demos, a public policy group.
