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Earlier this week we pointed out that comparisons between the US and Ireland or Greece were improper. The best analogue to the US economy is that of the UK.They too control their own currency, and thus have far more leeway on the debt, and they too are getting serious about austerity. That’s already creating a stagflationary environment, complete with plunging consumer confidence.
And now high gas prices are being felt.
The Guardian (via @spbaines) reports that sales at “out of town” shopping malls — so, basically outlet stores that people have to drive to — are in freefall. We’re talking 12% declines in a matter of weeks. Priced in pounds, Brent oil is already at its highest level of all time, and the impact is being felt, at least when it comes to stores that rely on shoppers who have to drive.
In the US, it’s actually remarkable. March retail sales looked surprisingly strong despite surging gasoline. And everyone who has predicted the death of the consumer thanks to high gas has been proving wrong. But the US economy is looking more UK like all the time, and this is the latest warning.