Oct. 29 - Sales of the new iPhone most likely gave retail sales a shot in the arm in September, as car sales began to lose traction. Bobbi Rebell reports.
If given the choice- get a shiny new iPhone- or a brand new car- what did Americans choose in September? In a sign of the times- the iPhones won out. Spending on tech devices including iPhones powered retail sales in September- while auto sales fell. Here's what Mesirow Financial's Adolfo Laurenti had to say about the surprising data: SOUNDBITE: ADOLFO LAURENTI, DEPUTY CHIEF ECONOMIST, MESIROW FINANCIAL (ENGLISH) SAYING: "There is a change in the attitude of the consumer, especially teenagers these days really like to be connected. They want to have their technological gadget. That is the way they stay in touch with their friends, and that is really shifting the focus of many buyers from cars, as it traditionally was for a generation like mine to the younger generation who are really focusing on all the technology." Plus a lot of them still can't get jobs. They have a ton of student debt, and interest rates are creeping up. They also can't afford to buy homes. Prices there keep rising- according to the latest S&P/Case-Shiller data. S&P Dow Jones Indices David Blitzer. SOUNDBITE: DAVID BLITZER, CHAIRMAN OF THE INDEX COMMITTEE, S&P DOW JONES INDICES (ENGLISH) SAYING: "12.8 percent annual rate of gain is a bit too fast to be sustained over the long term, and indeed there are some forces in the economy that look like they are going to temper this rate of increase going forward. Mortgage rates have been rising over the last few months. Existing Home Sales were off in the most recent report. Pending Home Sales which is people contracting to buy a house have been declining over the last few months." All this points to more trouble- and given new data that inflation remains firmly in check- more delays in the Fed's plans to curtail its support of the U.S. economy. SOUNDBITE: ADOLFO LAURENTI, DEPUTY CHIEF ECONOMIST, MESIROW FINANCIAL (ENGLISH) SAYING: "We expect now that they will continue to stimulate the economy with the low interest rates, probably well into 2015 and probably delay the beginning of the starting of tapering, the beginning of the pullout of these unconventional monetary policy probably until March." Laurenti adds that the worries leading up to the recent U.S. government shutdown also did a lot of damage- including psychological damage- to the economy as well.