The New York Times
Posted on 08/05/2009 10:49:07 AM PDT by Cheap_Hessian
The broader economy may be testing the bottom, but for American consumers, there appears to be no end yet in sight for falling wages and higher living expenses.
That was the picture painted Tuesday by the government’s monthly report on personal incomes and consumer spending. While consumers spent more in June, they did so because prices of food and energy were rising, and not because they were ready to spend freely again.
Personal incomes sagged as employers continued to cut wages and reduce working hours. And the personal saving rate, which had been rising, dropped sharply from a month earlier as one-time transfer payments from the government stopped arriving in people’s bank accounts.
“Consumers are not spending any more money,” Steven Ricchiuto, chief economist at Mizuho Securities, said. “They’re still consolidating.” Personal income fell back 1.3 percent in June, just a month after a one-time $250 payment to Social Security recipients lifted it by the same amount. And in a sign of continuing troubles for American workers, private wages and salaries fell for a fourth month, slipping a seasonally adjusted $28.6 billion after a $11.3 billion drop a month earlier.
Private wages and salaries have fallen for each of the last 10 months as businesses trimmed costs by freezing pay, imposing salary cuts and reducing the work week. Personal income has dropped by a seasonally adjusted $372 billion since September.
“Wage and hour cuts are big right now,” Adam York, an economist at Wells Fargo, said. “The economy remains fairly weak, and the labor market even weaker. We’ve lost 6 million jobs, and unemployment is rapidly heading toward 10 percent. There’s just not a lot of wage pressure out there right now.”
(Excerpt) Read more at nytimes.com ...
The New York Times
Hard to believe the first paragraph I read was from the NY Times. Do you know how bad it is when the Times admits people are spending more because grocery/gas prices are rising?
i am just thankful my wife found a job after only being laid off for 2 months
biggest concern for us was health insurance
we dont really have a family plan at my work
again thank GOD she found something and at almost equal pay
Bag of Tostitos at Target yesterday $4.69!! Needless to say I passed those by.
$15T net worth lost
Wages up 4% in DC
Wages down 4% everywhere else
7 Million jobs permanently lost. The next 5 years will be job loss stagflation. (Velocity not seen)
No Deleveraging yet
When I heard the numbers, the first thing I thought was “DUH! Of course consumer spending is up! I’m spending more for the same amount of groceries!” Or less, even!
that almost sounds a little bit like inflation.
I saw that same price at Target and bought some at Walmart — generic brand of white corn which turned out to be good for $2.75.
Never thought I would be buying my groceries almost exclusively at Walmart but even their canned mushrooms under the Great Value label tasted the like the higher priced ones.
Their produce/eggs come from local producers which seems to be keeping those prices down as well.
It used to be that Target/Walmart were separated by pennies but someone at Walmart has cut a bunch of prices and the number of people shopping in the store shows the lower prices.
I used to not pay attention to what I was buying but I have become a careful shopper after seeing the grocery bill rise with buying less groceries.
How can they say there is little to no inflation? I see it everytime I go to the store. I also drive less as gasoline is on the rise again.
Bump!
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