Burger King, Wal-Mart and other major retailers are lowering their sales forecasts and adjusting their prices in anticipation of reduced consumer spending, following the expiration of a payroll tax holiday in January that knocked 2 percent off workers’ take home pay. More than 45 percent of consumers surveyed by the National Retail Foundation early this month say their spending plans have taken a hit because of changes to federal tax laws. The payroll tax hike is estimated to cost the average household $1,300 a year and reduce consumer spending by $110 billion, according to Citigroup. - Read more at the Wall Street Journal
IT’S NOT AS BAD AS IT LOOKS Don’t’ expect to hear this from politicians, but Western Civilization as we know it won’t end if the sequester takes effect next Friday. The Fiscal Times’ Josh Boak and Eric Pianin report that “while the sequester may use a feckless meat cleaver approach to trim spending on defense and many domestic programs it’s not enough to put the whole economy through a meat grinder.” - See the five reasons not to panic about next week’s sequester deadline at The Fiscal Times
WHEN WILL GAS PRICES COME DOWN? HSBC Bank’s chief US economist Kevin Logan told Politico that he expects prices at the pump to drop later this year and in 2014. “U.S. domestic production of crude oil is rising and should gradually substitute for more expensive imported oil. Second, Canadian exports of crude oil to the U.S. are expected to rise steadily over the next few years.” - Read more at Politico
SENATE FLOATS TWO SEQUESTER SOLUTIONS Next week, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., will introduce competing bills to replace the sequester cuts scheduled to take effect next Friday. - See the Senate calendar here
