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Worst income dip in 20 years doesn’t stop spending- Consumers keep at it despite ....
Marketwatch ^ | March 1, 2013, 11:10 a.m. EST | Jeffry Bartash,

Posted on 03/01/2013 12:26:47 PM PST by Ernest_at_the_Beach

Consumers keep at it despite tax increase at start of year

WASHINGTON (MarketWatch) — Consumers increased spending in January for the third straight month, suggesting that a big drop in income and a tax hike at the start of the year only exerted a mild drag.

Consumer spending advanced a seasonally adjusted 0.2% last month, the Commerce Department said Friday. That matched the estimate of economists polled by MarketWatch.

Americans continued their spending ways despite an increase in their taxes and the biggest plunge in income in 20 years.

A two-year law that reduced payroll taxes by 2% expired in January and the government also raised rates on the very rich. For people earning $1,000 a week, the payroll tax hike takes an extra $20 out of their paychecks.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: ecconomy

1 posted on 03/01/2013 12:26:57 PM PST by Ernest_at_the_Beach
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To: Ernest_at_the_Beach
The consumers who transfer their monthly EBT balance to Walmart are still spending every cent they receive, but the ones who actually earn their money are not, if they can help it.
2 posted on 03/01/2013 12:30:28 PM PST by E. Pluribus Unum ("Somebody has to be courageous enough to stand up to the bullies." --Dr. Ben Carson)
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To: Ernest_at_the_Beach

Saving less and buying more guns.


3 posted on 03/01/2013 12:30:57 PM PST by LibWhacker
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To: Ernest_at_the_Beach

Worst income dip in 20 years doesn’t stop spending- Consumers keep at it despite ....


Heh. Looking at government income and spening figures as well, it looks as though ours truly is a government “of” the people.


4 posted on 03/01/2013 12:32:08 PM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Ernest_at_the_Beach

People are living like like there is no tomorrow.

I wish there wasn’t.


5 posted on 03/01/2013 12:33:12 PM PST by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both)
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To: Ernest_at_the_Beach
These statistics do not take into account the full extent of government give away programs. People who work for a living are being devastated. People who sponge off the taxpayers are doing great.
6 posted on 03/01/2013 12:33:54 PM PST by detective
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To: LibWhacker

I’ve spent the bulk of my money on boat anchors over the last month.


7 posted on 03/01/2013 12:34:08 PM PST by demshateGod (The fool hath said in his heart, There is no God.)
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To: Ernest_at_the_Beach

I will not fall for anything a department of this administration puts forth. I have specifics I have to shop for every week. IOW I’m out there, and I see what’s NOT happening, and what’s NOT happening is consumers are NOT out there blowing their dough.

Essentials are where the reluctant cash is going, rarely anything else.

“Consumer spending advanced a seasonally adjusted 0.2% last month, the Commerce Department said Friday. That matched the estimate of economists polled by MarketWatch.”

Wondering what economists MarketWatch polled. Obama Kenyanesian economists perhaps.


8 posted on 03/01/2013 12:34:34 PM PST by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: E. Pluribus Unum

,,,if they can help it.”

I certainly don’t have an EBT although I’m sure I pay for several. My spending is up at the grocery store but I can now easily carry everything I can afford to buy out in just two bags every week. People I know who had a little money left over at the end of previous months now have none, are getting less for their money and having to juggle bills around just to make ends meet. It’s like playing Russian roulette except that there are no empty chambers any more.


9 posted on 03/01/2013 12:37:04 PM PST by Grams A (The Sun will rise in the East in the morning and God is still on his throne.)
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To: rockinqsranch

A lot of spinning going on....


10 posted on 03/01/2013 12:39:40 PM PST by Ernest_at_the_Beach ((The Global Warming Hoax was a Criminal Act....where is Al Gore?))
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To: LibWhacker

Good strategy.


11 posted on 03/01/2013 12:41:18 PM PST by Ernest_at_the_Beach ((The Global Warming Hoax was a Criminal Act....where is Al Gore?))
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To: Ernest_at_the_Beach

“And consumer spending rose just 0.2% with most of it going toward higher heating bills and filling up the gas tank.”

http://www.usatoday.com/story/money/business/2013/03/01/personal-income-consumer-spending-january/1956029/

Yes, when food and fuel prices rise, consumers spend more money...


12 posted on 03/01/2013 12:43:51 PM PST by ltc8k6
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To: Grams A
I just went to Subway. Every once in a while I treat myself to one of their roast beef sandwiches. I went there last month and it was $6 for the sandwich. Went there today and it is $7.50. I decided to skip it.
13 posted on 03/01/2013 12:45:38 PM PST by E. Pluribus Unum ("Somebody has to be courageous enough to stand up to the bullies." --Dr. Ben Carson)
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To: E. Pluribus Unum

I gave up on subway and now go to the local supermarket deli. For $6.50 I get a large sub and have it cut in half. That makes two meals when I am on a road trip which I think is a pretty good deal.


14 posted on 03/01/2013 12:49:41 PM PST by lodi90
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To: Ernest_at_the_Beach

Umm yea spending is up. Gasoline around 3.90. I pack my own lunch. Lunch meat is out of sight. I like to shoot skeet, yea, that is now the sport of kings, and I reload. Needed tires..almost needed cpr. Funny I haven’t heard any inflation numbers lately.


15 posted on 03/01/2013 12:53:30 PM PST by cork (Remember Bengazi!)
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To: Ernest_at_the_Beach

Just today a co-worker said, “I’m gonna spend it while I have it.”
Those are her exact words.


16 posted on 03/01/2013 1:00:12 PM PST by lucky american (The Democrats will follow the big "D"even if it means going over a cliff.)
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To: cork
Bernake says no significant inflation at the moment.
17 posted on 03/01/2013 1:00:42 PM PST by Ernest_at_the_Beach ((The Global Warming Hoax was a Criminal Act....where is Al Gore?))
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To: Ernest_at_the_Beach

If folks were still spending, we wouldn’t see all these businesses shutting down or having financial difficulty. I have to wonder who does the math for politicians? A Californian perhaps?


18 posted on 03/01/2013 1:01:57 PM PST by formosa (consider me galt)
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To: Ernest_at_the_Beach

How much of the increased spending is due to high gas prices?


19 posted on 03/01/2013 1:09:45 PM PST by kabar
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To: detective
People who sponge off the taxpayers are doing great.

Yes, I see them at Whole Foods...using their LoneStar cards.

Dear Leader sez they deserve the finer things in life...compliments of you and I.

Don't dare cut that part of the spending problem...people will suffer!

20 posted on 03/01/2013 1:11:01 PM PST by Jane Long
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To: kabar

Good point.


21 posted on 03/01/2013 1:11:47 PM PST by Jane Long
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To: lucky american

“Just today a co-worker said, “I’m gonna spend it while I have it.”
Those are her exact words.”

As taxes and inflation pick up, pretty much everyone is going to be saying that.


22 posted on 03/01/2013 1:14:08 PM PST by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
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To: ltc8k6

I spend my money as soon as I get it (While it is still worth something).


23 posted on 03/01/2013 1:14:39 PM PST by Scarlet Pimpernel (And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?)
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To: Ernest_at_the_Beach
I don't buy this at all. In our heavily Republican area consumer spending is way off. Small business are closing left and right.

I'm assuming it's because conservatives are scared of what Obama is going to do next and are being very careful with their money. Meanwhile, the uninformed are probably spending more Federal and borrowed money than ever, so maybe that's what led to the overall increase.

24 posted on 03/01/2013 1:23:40 PM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: Ernest_at_the_Beach

Squeezing the last pennies out of their accounts so they can declare, “I’m busted flat”. Never before has the phrase had so much truth in it...


25 posted on 03/01/2013 1:37:34 PM PST by trebb (Where in the the hell has my country gone?)
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To: LibWhacker

. . or long-storage foodstuffs, or trade goods. People FEEL that the house of cards is collapsing. . .


26 posted on 03/01/2013 1:57:46 PM PST by Salgak (Acme Lasers presents: The Energizer Border. I **DARE** you to cross it. . . .)
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To: Ernest_at_the_Beach

They are spending more because crap COSTS MORE!

Idiots.


27 posted on 03/01/2013 2:04:36 PM PST by autumnraine (America how long will you be so deaf and dumb to thoe tumbril wheels carrying you to the guillotine?)
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To: E. Pluribus Unum
I just went to Subway. Every once in a while I treat myself to one of their roast beef sandwiches. I went there last month and it was $6 for the sandwich. Went there today and it is $7.50. I decided to skip it.

Return to normal price. Last month was their $5 regular footlong sale ($6 for the super special ones like roast beef).

I went yesterday and they were running out of bread because so many people (including me) were trying to get one last $5 sub before March.

28 posted on 03/01/2013 2:28:42 PM PST by KarlInOhio (Choose one: the yellow and black flag of the Tea Party or the white flag of the Republican Party.)
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To: Ernest_at_the_Beach
Worst income dip in 20 years doesn’t stop spending- Consumers keep at it despite ....

Indicative of why the US has the lowest savings rate of any developed nation, but it also could indicate people want to spend the money they have before hyperinflation kicks in. Bernanke says that the supply of money is unlimited, which means he plans to run the printing presses at the Bureau of Engraving day and night, nonstop.

29 posted on 03/01/2013 2:30:16 PM PST by The Sons of Liberty (It's not "GUN CONTROL"! It's "PEOPLE CONTROL"!)
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To: Ernest_at_the_Beach
Worst income dip in 20 years doesn’t stop spending- Consumers keep at it despite ....

What is the typical lag between a change in income and a change in spending? December was a high income month because a lot of companies paid dividends early or paid bonuses to high-end employees to get them in before the 2013 tax increase. Then January jacked up taxes 2% of gross which would be 3-4% of the typical net income. If people are still spending their December income in January then I'm not surprised that spending hasn't dropped yet. Let's wait to see what February looks like.

30 posted on 03/01/2013 2:33:45 PM PST by KarlInOhio (Choose one: the yellow and black flag of the Tea Party or the white flag of the Republican Party.)
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To: Ernest_at_the_Beach

Well, that explains our representative form of government.


31 posted on 03/01/2013 2:47:30 PM PST by EricT. (The Second Amendment is Tyrant Control.)
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To: Ernest_at_the_Beach

so... biggest drop in post-tax income yet consumers continue spending? something doesn’t add up

was there an increase in the average credit card debt? if not, the consumer spending numbers are wrong

my guess is someone wants consumer spending to be up... and just adjusted the numbers to look better


32 posted on 03/01/2013 2:50:42 PM PST by sten (fighting tyranny never goes out of style)
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To: E. Pluribus Unum

That’s ridiculous. Increase it by maybe $.25, but 20%? Or just leave it the same price and charge for whatever extras you want to add, like lettuce, etc. At least you would have a choice about what you really want to spend your money on. My son and his family always go to Subway when they travel because it’s the one place where they can watch their food being prepared. I quit going to the local one last summer because I was the only non-Spanish speaking person there, including all the employees.

Not sure where all of this is going to stop. House insurance just went up 30% this year over last year. Much of the fresh fruit in the store were I normally shop is borderline bad. Costs too much so people don’t buy. Had a discussion with the manager about why they don’t just sell it for less in the beginning rather than throw a lot of it out and make zero. Their logic just blows my mind.

Blue Belle had a great sale this weekend on half-gallon sized ice cream. Lot less expensive than half a gallon of milk. May get some for desert and also to put on my cereal.


33 posted on 03/01/2013 2:59:39 PM PST by Grams A (The Sun will rise in the East in the morning and God is still on his throne.)
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To: LibWhacker
"Saving less and buying more guns."

I can imagine a day when a bushel of corn will cost 25 rounds of .22lr.
34 posted on 03/01/2013 4:29:22 PM PST by 45semi (A police state is always preceded by a nanny state...)
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To: LibWhacker
Saving less and buying more guns.

Heh. It's true.

But necessary expenses are rising: food, fuel, mortgage [or rent], etc.. It only stands to reason that if incomes are falling, then after spending the same on those necessities, there's less left over to save.

And, Gaia forbid, that these ninnies in the press would ever mention that the government has driven the interest rates on savings to just about zero. So, there's no incentive, other than a cash-cushion, to save.

It's been fascinating to read the reporting on the income drop as it tries to shift attention to a drop in savings.

35 posted on 03/01/2013 4:49:24 PM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment. -Ludwig von Mises)
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To: Grams A

“House insurance just went up 30% this year over last year. ... “

Don’t you feel there are those that can get their price, and the rest of us are SQUEEZED to death?

My h/o insurance has gone up 53% over the past 3 years. The agents are doing fine! Nothing like a company, sharing the suffering.

Life insurance isn’t up because its a voluntary purchase. Any insurance that is mandated by govt or mortgages is like direct theft.


36 posted on 03/01/2013 6:45:39 PM PST by George from New England (escaped CT in 2006, now living north of Tampa)
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