Driving to the office this morning, I was listening to CNN in my beat-up Ford pickup equipped with Sirius satellite radio (gotta have some amenities, right?). The commentator was discussing today's news about April's disappointing consumer spending numbers, which were lower than expected...and the expectations weren't even that high.
The commentator mentioned that two things might have contributed the disappointing consumer spending results. First was gas prices, which hits people in the wallet or purse. Second was...you guessed it...housing issues. The theory is that falling house prices (or the perception thereof) creates a psychological barrier to consumer spending.
I'm sure there's some truth to the psychological theory. But perhaps it's also that many Americans have tapped out their equity and realize that in a crunch, access to easy cash via refinancing is no longer an option. What do you think?
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