The US fiscal cliff

Stocks, retail sales fall amid fear over fiscal cliff

 

As the fiscal cliff inches closer, the United States is poised to fall into an even deeper economic crisis as stocks sunk and consumers pulled back on shopping this year.

Press TV,

26 December, 2012

US stock markets fell on Wednesday following Christmas Day after a report showed holiday retail sales this year grew at the weakest pace since 2008, with investors attributing the loss to worries about the fiscal cliff.

The Dow Jones Industrial Average slipped 45.61 points (0.35 percent) to 13,093.47, while the S&P 500 dropped 8.66 points (0.60 percent) to 1,418, extending three days of losses. The NASDAQ Composite Index shed 23.10 points (0.77 percent) to 2,989.50.

On Tuesday, a report conducted by MasterCard Advisors SpendingPulse said that sales in the two months before Christmas increased only 0.7 percent compared with last year, defeating analysts’ expectations of reaching three to four percent. 

"I think people held back this year, just worried about that bigger cut out of their paycheck next year and having to tighten their belt," said Janna Sampson, an investment officer with OakBrook Investments.

Sampson went on to say that consumer spending fell due to fears over the "fiscal cliff" tax hikes and spending cuts which are scheduled to go into effect if the administration of US President Barack Obama and members of Congress do not agree on a new fiscal plan by January 1st, 2013.

The development comes while congressional lawmakers shut down the legislature for a long Christmas recess and as Obama boarded a flight to Hawaii for a family holiday, leaving the significant economic debacle entirely unresolved

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