Posted on 03/01/2013 12:26:47 PM PST by Ernest_at_the_Beach
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 ...
Good point.
“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.
I spend my money as soon as I get it (While it is still worth something).
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.
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...
. . or long-storage foodstuffs, or trade goods. People FEEL that the house of cards is collapsing. . .
They are spending more because crap COSTS MORE!
Idiots.
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.
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.
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.
Well, that explains our representative form of government.
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
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.
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.
“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.
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