The following news report http://www.cnbc.com/id/45428383 on how violence erupted in some stores in US on the occasion of Black Friday shopping day makes one sit back and rethink on US consumerism.
Should I take this desperation by the citizens of the World's biggest consumer as a sign of Consumer Confidence and rising demand among consumers or does it tell a different story altogether. It could also be that this is a day when retailers pamper consumers with huge discounts and its only on this day that the middle class consumers of US can manage to buy some of these goods which they have been procrastinating for some time in current economic turmoil!!
We all know that jobless rates in US are currently at one of the highest levels in the history of the country in modern times. US has a $ 15 trillion GDP and nearly 55% of that is consumer spending. These very consumers are the ones who are keeping the machines running in far off China and Indonesia and keeping the techie awake in India. What would happen if this massive consumerism gradually declines?
India and China definitely have 1/3 of the world population, but for them to replace the consumerism of US citizens, its a long way to go. India's GDP is currently $1.6 trillion and consumerism is a small portion of this. To replace the nearly $8 trillion US consumer market from the top spot, is a daunting task. The per capita income of USA is around $46,000. Compare this with the per capita income of China which is at $ 7,500 and India's which is $ 3,400. More importantly the proportion of people who are earning below this national income level is way too high in India and China. The huge disparity in income levels tilts the table all the more.
So basically it seems the World has to continue to depend on US consumers for a long time till India and China mature enough to shoulder the burden of World Consumerism.
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