Spender’s remorse has set in and retail-related exchange traded funds (ETFs) are showing the aftermath of a less enthusiastic buyer.

The most recent figures show that the American economy has shrunk by an annualized rate 0.3% in the 3rd quarter. Consumer spending, the largest factor in the GDP, fell at an annualized rate of 3.1%, according to a report by the Economist.

On top of consumer confidence bottoming out, the unemployment rate has risen to 6.1% and there is no bright side to that percentage. It is projected that unemployment may even be pushed to 6.3% in the weeks ahead.

Banks are loath to lend to anyone, furthering the mindset of a credit crunch. Lost wealth is seen as a chance for consumers to curb spending habits and to start putting their money in their piggy banks.

A few retail-associated ETFs hit by a lack of consumers consuming include:

  • SPDR S&P Retail (XRT): down 29.6% year-to-date

Retail Exchange Traded Funds (ETFs)

  • Retal HOLDRs (RTH): down 16.3% year-to-date

Retail Exchange Traded Funds (ETFs)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.