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Ghost shopping malls in the U.S. March 23, 2017

Posted by hslu in Economics, jobs.
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The Fed has just raised the key federal funds rate by 25 basis points, citing improvements in the labor market and rosy economic indicators. Two more rate hikes are widely expected before the end of 2017.

Indeed, the latest unemployment rate data shows that the U.S. is almost at full employment with unemployment rate at 4.7% as of 3/10/2917. In other words, according to the U3 data, most people who want a job have a job: washing dishes, flipping hambergers, driving for Uber, waiting tables at local diners or walking dogs for the top 1% in NYC near Trump Tower. 

We are not going to quibble about the U6 number because the media doesn’t report it and most Americans have never heard of it anyway.

To me, 4.7% U3 means people’s pockets are stuffed with $100 bills. They are happy. They are satisfied with their lives. They go out for beer and lobsters. They fly to exotic resorts for vacations. Of course, they buy stuff they want instead of what they need. They might save a penny here or a quarter there. They are confident in their future according tow the latest consumer confidence survey results.

But, according to this 3/23/2017 thestreet.com article on Yahoo Finance and other sources on the web, why are these U.S. retailers closing hundreds of their stores all over the United States?

Are people having less money because their jobs aren’t paying enough?
Are Amazon and eBay so successful selling almost everything on the Web that they ripped the faces off these once untouchable giants?

Have their profit margins been squeezed by higher costs because China has been exporting inflation to the world?

Do these big and small retailers simply lose touch with the changing spending habits of the consumers?

Do baby boomers stop buying from them because they only have enough to pay for medicines and food?

Or could the reason be as simple as America simply has too many shopping centers?

Whatever the reason, real estate operators in the U.S. will need to adopt and modify their operations so that they don’t end up with ghost shopping malls on their portfolio. 

Here are the known store closings for 2017. The list is long and no doubt that you have been to many of thrm:

  • JCPenney – 138 stores
  • Sears and K Mart  – 150 stores
  • Macy’s – 100 stores
  • Foot Locker – 151 stores
  • Kohl’s – 16 stores
  • CVS – 70 stores
  • Office Depot – 198 stores
  • Radio Shack – 552 stores
  • Family Christian – 240 stores
  • HHGregg – 88 stores
  • Pier One Imports – 100 stores
  • Staples – 118 stores
  • Tiffany – 11 stores
  • Bebe – 170 stores
  • Payless – 500 stores
  • Abercrombie and Fitch – 54 stores
  • Guess – 60 stores
  • Crocs – 160 stores
  • BCBG   Maxzaria – 118 stores
  • The Limited – 250 stores
  • Wet Seals – 171 stores
  • American Apparel – 110 stores

All together, there will be roughly 3,500 empty retail spaces across the U.S. To make the matter worse, WalMart reportly will close 269 stores in 2017. 

With so many stores closing up in 2017, how many employees will lose their jobs? 

Is America’s economy really that good?

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