With food prices spiking, gas costs rising and cost increases getting passed on to all areas of production, the Federal Reserve cuts interest rates.

The idea behind this move was to stimulate economic growth by making loans less expensive. However, checking the increase in the cost of foods and gasoline because of the already devalued dollar, seems that if real estate sales don’t pick up soon, we will have only a continued slowdown in consumer spending.

When consumers reduce their spending, capital expenditures usually reduce as well. Inflation-adjusted consumer spending slowed to an annualized rate of only 1 percent during the first quarter, versus 2.3 percent during the fourth quarter of 2007, while gross private domestic investments declined 4.7 percent.