Wealthy consumers, the 20% of the population responsible for nearly 40% of consumer spending, are closing their wallets, indicating an even rougher economic road ahead, reports Bloomberg. “When they begin to capitulate, that’s when we all head down,” said one economist. Blame deflating real estate prices and a sagging stock market for the lowest consumer confidence rating since 2004.
High-end retailers report sales growth plunged to 3.3% after running at 10% earlier this year. Even iconic retailer Nordstrom’s showed a decline on October sales. “The perfect storm is coming at the absolute wrong time,'' said one analyst. Economists predict consumer-spending growth will slip from a 3% annual rate to 2% in the fourth quarter, deepening the economic slump. (Read more US economy stories.)