Jansing and Co | February 20, 2013
>>> the nation's largest employer, walmart , appears worried about the economy. internal e-mails obtained by bloomberg show shoppers are feeling the pinch of the take roll tax hike. one describes february sales as a total disaster. another asks, where are all of the customers? where's their money? the " washington post " sums it up this way. walmart is freaking out about the economy, should the rest of us? let's bring in " washington post " economic policy correspondent jim. should the rest of us freak out?
>> maybe, there's two possible stories, one is that walmart is seeing is very bad for the rest of the economy. and that's the story like this. consumers weren't expecting a big payroll tax hike to hit them in january and started to notice it when the paychecks were lighter than expected in the first half of the month, seconds half of the month. they pulled way back on spending in february. there's going to be some of that effect going on. obviously most economists think the payroll tax hike will chill growth in some way. the question is, will consumers adjust and is it sort of a one time deal? the other story though, walmart tends do do very well in recessions because they are such a retailer that caters to the lower end of the economic spectrum . they've stocked cheap products. it's possible if people are doing better now they are moving to slightly more expensive rivals of walmart like target, which could very well be the case too. it could be a mix or one or the other.
>> is it still overall bad news? isn't walmart a huge, relatively huge to anyone else, percentage of the gdp?
>> yeah, they are a big deal . we should never get too excited about any one company. but what they represent here is very important, a lot of americans shop at walmart . if a lot of americans aren't shopping right now because they have less money because their taxes went up and that's something that's going to provoke a sustained pull back in consumer spending , that is going to hurt gdp growth .
>> here's a $6 million question, walmart stocks took a hit but if you look at the stock market , we're one good rally away from really setting some records. obviously we're over 14,000 even as we speak . what's a better indicator? walmart sales or the dow jones ?
>> i wouldn't call either of them a perfect indicator but a lot of what's going on in the market right now is reflective of optimism that things are going to get better and reflective of the facts that the federal reserve keeps doing things to stimulate the economy. i think if there's one thing we might take away from the walmart experience, is that evidence like this is the sort of thing that will keep the fed easing monetary policy for longer. if that's the case, the stock market is going to keep rallying because the feds moves have been very good for stocks.
>> even if the sequester kicks in.
>> the sequester is a big thing hanging over the economy right now. we're looking at the fairly large, at least a point slice off growth if the sequester goes through in the region --
>> a full point slice?
>> full point of growth, sure. like 700,000 jobs was the macro advisers estimate yesterday. it's a big deal . if it goes through it's a big deal .
>> jim tankersley, good to have you.