Americans’ income and spending drop, despite stimulus

[Hannah Bell]

American households cut spending and saw income stagnate in September, despite a massive government stimulus program propping up their bank accounts.

Personal disposable income decreased 0.1 percent, after adjusting for inflation, the Commerce Department reported Friday. Personal spending fell 0.5 percent, after four months of gains.

The hit to household bank accounts would have been worse without the massive federal stimulus program designed to prop up economic activity. The nation’s inflation-adjusted personal income has been sloping downward during 2009, when government transfer payments are subtracted out. But including the transfer payments – which have risen because of the stimulus efforts since February – total personal income is about where it stood early in the year.

“Households are depending on transfer payments from the government just to stay even,” economists at the investment firm Goldman Sachs wrote in an analysis of the report. “While the downward momentum has abated, it has not turned positive. Meanwhile, income on assets – interest and dividends – continues to drop.”

http://features.csmonitor.com/economyrebuild/2009/10/30/americans-income-and-spending-drop-despite-stimulus/



More signs of consumer retrenchment

Some new sightings on the “where have all the consumers gone” front. The Financial Times reports that Americans are cutting back at the grocery store, even on pet food. That tells me that despite the effect of cash for clunkers and a pick-up in luxury spending, the average consumer is belt-tightening, literally and figuratively:

Tights, sunglasses and boneless chickens have joined the list of casualties of America’s economic crisis, as the era of impulse shopping gives way to more wary behaviour in the nation’s grocery aisles.

Americans unwilling to pay extra for their food to be prepared bought $65m more whole frozen chickens in the third quarter than a year earlier, and $50m fewer boneless birds… 63% of Americans expect to spend less on holiday presents this year than last year. And remember, last year people had just witnessed the meltdown. More findings:

Concern over personal finances also rose in October, as 27 percent rated their finances as poor, a 4-point increase from September. Forty-nine percent felt their finances were getting worse, a 1-point increase from September.

For the seventh straight month, less than a majority of consumers have money left over after paying monthly bills...

http://www.nakedcapitalism.com/2009/11/more-signs-of-consumer-retrenchment.html

[Selatius]

1. Luxury spending should be up. Wall Street bonuses are 40% higher this year than last.

The corporate oligarchs are doing just great.

[NightWatcher]

6. rich people do not spend their money. they re-invest it. us poor peeps spend every $

want to stimulate every aspect of the manufacturing and service economy? give money (JOBS) to middle and lower working class Americans and watch us BUY SHIT WITH THE MONEY and the government reap TAX REVENUES.

Give me a ton of money and watch me stimulate...
give me money and watch me stimulate by buying a new car
give me money and watch me stimulate by buying a new home
give me money and watch me stimulate by buying more shit that I dont really need

give a ceo another five million and watch him move it to the Cayman's to dodge taxes on it.


Feel free to FedEx my Nobel Prize to my house. If I'm not home, leave it on the back porch

[Tunkamerica]

2. I'm waiting for my 8000

i just bought my first house and plan on fixing it up a little with the tax credit come february.

[SoCalDem]

3. My son and his wife just signed papers on theirs this week

They are so excited. and they got a good deal too. the house they bought was built in 1978, and has a very nice-sized corner lot, 2450 sq.ft.( the house...not the lot:)..) and it was bought in July and re-done top to bottom..new appliances, new roof, new paint, new tile & carpet & kitchen & baths remodeled. The people who bought it in July planned to live there, but ended up having to sell. My son & his wife were in the right place at the right time, with $79K to put down, and got a 4.15% 30 yr fixed mortgage...their house payments PITI are $300 a month less than the rent they paid on a cheesy 2 BR apartment.

They are both savers, and have zero debt, so I can see their future as a very comfortable one:)

[tsuki]

4. You taught them well. Congrats!

:toast:

[Mari333]

5. well DOH DOH DOH there are NO JOBS

and the ones left pay crap wages. as long as the outsourcing continues we are fcked.