Americans Are Too Broke To Buy New Clothes

Consumers aren't buying discretionary items like clothes right now.

So says Macy's CEO Terry Lundgren as the company reported earnings that disappointed Wall Street for the first time in four years today.

“Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment,” Lundgren said in a release.

The situation at Macy's shows the continued challenges faced by average Americans, Brian Yarbrough, an analyst with Edward Jones, told Bloomberg.

“It’s still pretty tough out there for middle-income consumers,” Yarbrough said. “If you look at the kinds of jobs people are getting, they are service jobs paying $9 to $12 an hour. They are spending on homes and cars, they are not spending on apparel.”

The slowdown doesn't bode well for other retailers, especially embattled competitor JCPenney, reports Andria Cheng at MarketWatch.

"With consumers’ disposable income seeing little growth, apparel and retailers selling nonessential things have also had to compete with increased spending for bigger-ticket items such as autos," Cheng writes.