Consumer spending tumbles while incomes stagnate, reinforce concerns about economic recovery

AP ^ | 10/30/09 | MARTIN CRUTSINGER

[Jean S]

Consumer spending tumbles while incomes stagnate, reinforce concerns about economic recovery

WASHINGTON (AP) -- Flat incomes suggest more weakness ahead in consumer spending, reinforcing concerns about a ho-hum holiday shopping season and a sluggish economic recovery.

"This recovery is going to be very weak. Consumers are in no position or mood to spend. Their wages are down and they can't get credit," said Sung Won Sohn, an economics professor at California State University's Smith School of Business.

Concerns about the economy sparked by disappointing government data on spending and incomes sent stocks down Friday, erasing the previous day's big gains. The Dow Jones industrial average lost about 250 points, and broader indexes also fell.

[GoCards]

Hey, dont worry Bama saved and created 600,000 jobs!!! Yahooooooooooo

[Mad_Tom_Rackham]

And soon, taxes will be skyrocketing and inflation will kick in. Welcome to the Obama/Democrat “Recovery”.

[pieceofthepuzzle]

This is all part of the usual socialist ‘equality’ in which everyone is equally miserable, without much hope for upward mobility. Obama is ‘redistributing’ what people have earned through honest hard work and is dividing the nation.

[HiTech RedNeck]

stagflation

welcome back carter

[ronnie raygun]

Destruction by design!

[kcvl]

welcome back carter

He is worse than Carter and he AIN'T welcome!

[Tax-chick]

My husband works for an extremely-low-end retail chain. They’re doing very well, and he just received a bonus large enough (after tax) to retire our outstanding consumer debt.

The remainder of our windfall is going to charity.

[Mad_Tom_Rackham]

In Kenya, however, this might be considered to be superior performance.

[mmichaels1970]

welcome back carter

IMO, welcome back Bresznev.

[VRWCRick]

It’s real simple!

NO JOBS, NO RECOVERY!

[sten]

welcome to the top of the climb... next will be the plunge

\o/ Yea! Change!

[PGR88]

The consumer is gone - and for a long time.

The US savings rate was negative for many years. It is now just getting above zero, and even a minimal “normal” would be 7%. We have a huge bulge of baby-boomers ready for retirement, whose homes and stocks (if they own them) are worth a lot less. You won’t see the consumer return for a long time.

[Grunthor]

“Consumer spending tumbles while incomes stagnate”

YAY RECOVERY! GREAT JOB OBA-MAO!

[DeusExMachina05]

Good to hear it. I guess people being frugal with their money cant hurt them or people in the business of servicing them. Perhaps these habits will stick if and when times improve. For the sake of our country I hope they do.

[Jean S]

lol, yep, everything will be ok.

[RJL]

"This recovery is going to be very weak. Consumers are in no position or mood to spend. Their wages are down and they can't get credit,"

Massive new taxes and inflation will make it much worse than it is today.

[ex-snook]

Consumers are tapped out. They need jobs to have income to buy.

We have been trading jobs to China and the rest of the world for 10 years. No wonder we have unemployment.

Trade is we buy product from you and you buy product from us. Not we buy product from you and send you factories, jobs and treasuries in return.

We have to make more of what we consume before we have recovery.

[fhayek]

Obama claimed that the “stimulus” was working as planned. This proves that they are wrong. The whole idea behind stimulus, the reason given by liberal economists anyway, is that you jump start the economy, which is supposed to kick off consumption and spur the private sector economy. If you aren't priming the pump, its not working as advertised. I always thought the whole scheme was half-baked to begin with, but I don't see how anyone can claim that the stimulus was a success if you don't have either job growth or improved consumer confidence.

[historyrepeatz]

“Shovel ready” jobs.. Ya know, the ones that go to those who are here ILLEGALLY.

[prairiebreeze]

Can’t be. A dyed-in-the-wool democrat told me just today that things are “turning around”.

(rolling eyes)

[Moe Tzadik]

Maybe next time we can elect an anti-American, anti-military, anti-white, anti-Capitalist, anti-Jewish, anti-Freedom, anti-Constitution Communist pig bastard with foreign and domestic terrorists as close personal friends.

Someone who has sealed all his personal, birth, school, and professional records. Someone who hasn’t even run a f’ing hot dog stand on the corner.

Someone who will PURPOSEFULLY destroy our economy for our children and their children in just eight months.

Someone who declares and forces phony flu and climate “emergencies” on a population who knows that’s bull’t.

A Communist with dozens of Communist associates, now White House Czars and advisers.

Someone who will “...fundamentally transform the United States of America”

[blam]

NYSE Open Disrupted By Flood Of Orders

[rwfromkansas]

I noticed the dollar went up again today with more bad news.

Any econ people know why the dollar drops when we get good news but goes up with bad?

[ohioWfan]

Obama’s poll numbers should be in the teens.

[TribalPrincess2U]

I foresee gloomy holidays.

If you think last season was bad, just wait.

Only the elite dimocRATS will be able to afford anything.

[dbrew2u]

This recovery is going to be very weak.

One more time.....there is NO recovery !!!

[Hoosier Catholic Momma]

The income for my husband’s company fell by 51% for the 3rd quarter compared to 2008...sales were down 25% from 3Q 2008. Gee, I wonder if he’s getting a pay raise next spring.

[Soul Seeker]

I bought a new jacket. Aside from that, not buying anything aside from necessities such as food until I do my Christmas shopping. It’s not that I can’t, I have some money saved. I’d just prefer to keep those savings given what’s happening in D.C. or even my own state government. I’m not anticipating losing my job, but I’d like to have the means to support myself awhile should it happen.

[American Constitutionalist]

Wait, wait, this can't be true, we were told that the GDP grew in the last 3 months, and that there were 600,000 jobs saved, and the economy is hitting on all cylinders, and everything is just peachy and rosy, the media tells us so.....
More proof that it's just a ASTRO-TURF recovery...

[Polynikes]

When the dollar goes down the stock market goes up because all the equities are denominated in dollars, making them more expensive, sort of a forced inflation. I believe the dollar is or at least was being forced down to help the NYSE to rally. All that TARP funding the FED refuses to disclose was probably being used to help fuel the rally.
A lot of the public use the NYSE as a gauge of general economic well being. In the short term deflation will rule. The dollar is not a dead horse yet and cash will be king. Inflation may over take us but not yet.

[RayChuang88]

Between American companies not willing to hire and the fears about the end of the 2003 Bush tax cuts, is it small wonder why Americans are barely spending money at all?

We need to MASSIVELY overhaul our income tax system (or even dump it altogether) to encourage more personal savings and capital investment staying in the USA, a change that would immediately jump-start the US economy.

[Polynikes]

When something like 70% of GDP is consumer spending and with so many without work, well look for a red Xmas. No Job->No Money->No spending. Xmas will be bleak. I actually don't think it will be that bad for all. Those with faith, family and belief in themselves will be the better for it. You don't need $500 sneakers or the latest XBOX game. XMAS will take on a renewed meaning for some with the moral fiber and spirit to overcome.

[FastCoyote]

[Any econ people know why the dollar drops when we get good news but goes up with bad?]

I have the same question.

[hinckley buzzard]

640,000 and change, if I recall. You see how much the markets believed him.

The significant fact is, no one with "skin in the game" believes the spew coming from Treasury, the VP, and other subsidiaries of the Ministry of Information any more. Pantywaist liar Timmah! Geithner and his fellow ivy league jerkoffs have jumped the proverbial shark.

We have entered a new era, in which the word of the United States Government is no damn good, and everyone who matters, knows it.

This cannot but end badly. If anyone still insists on a long term investment, I would wholeheartedly recommend long term puts on the S&P. Or the Dow. Macht nichts.

[hinckley buzzard]

RE: the baby boomers, many are now eligble to withdraw from IRA's etc. Expect this to happen, increasingly, every year from now on. It will set a cap on rallies, as they sell into strength.

[WhistlingPastTheGraveyard]

concerns about a ho-hum holiday shopping season

If AP is already talking about a "ho hum" shopping season, get ready for a bloodbath.

[olrtex]

Both the main-street economy and the stock market eventually respond to fundamentals. The big fundamental now seems to be the justifed fear created by Obama’s Marxism. Look out below.

[genxer]

you know the other problem which may be off thread a little but is the fact there is no inventory. I just got done filling our orders for the day and had to turn away 60 percent of them because the manufacturers just don’t have them because of credit is still frozen.

[katiekins1]

welcome to the new world disorder.

[olrtex]

Both the main-street economy and the stock market eventually respond to fundamentals. The big fundamental now seems to be the justifed fear created by Obama’s Marxism. Look out below.

[Go Gordon]

Consumers are in no position or mood to spend. Their wages are down and they can't get credit," said Sung Won Sohn

We can get credit, but we don't want to go into debt. We're in savers mode because the economy is gonna suck as long as Obama and the democrats are in charge and we don't want to burder ourselves with debt. There you have it, professor Sohn.

[Mike Darancette]

The Bush recession is officially over, how long until the Obama recovery becomes the Obama Recession? 4th quarter should do it.

[Misterioso]

The remainder of our windfall is going to charity.

Could I have a few bucks?

[Amish with an attitude]

There is not enough taxing power, stealing power, money and bond-printing power on this globe for these dudes to worm their way out of a major collapse.

[Eric Blair 2084]

BREAKING NEWS....Robert Gibbs and the Iraqi Information Minister have both been fired by Team Obama as Press Secretaries. Meet the new White House Press Secretary.....Jim Mora.

"Layoffs!!! Layoffs??? Don't talk about layoffs. Layoffs??!!"

[bustinchops]

Steve Wynn said it all - no jobs, no recovery. period. End of discussion. There is nothing else except jobs that will cure this economic morass we’re in.

[hiredhand]

Remember that siege I was talking about?

[qwertypie]

Everyone must do their patriotic duty and spend only for absolute necessities. Some pain now is our only hope for defeating a long term debacle of liberalism and Obamaism. This is something proactive that conservatives can do while in the political wilderness.

[hiredhand]

Steve Wynn said it all - no jobs, no recovery. period. End of discussion. There is nothing else except jobs that will cure this economic morass we’re in.

For certain you don't mean the creation of jobs via artificial means? By this, I mean the creation of jobs by gov't handouts of printed paper money. Something like that would have had no lasting impact under the national financial circumstances we're seeing now.

Our administration could have averted this disaster and come out as real heroes if they could have done but one thing...and that thing is SACRIFICE. They should have cut taxes on a massive scale in October of 2008 instead of destroying the nation with debt, and promising something that couldn't possibly happen. But to cut taxes, they would have had to make a corresponding cut in funding to social programs and others, and they're simply not willing to do this. They're simply not willing to sacrifice. They talk about sacrifice, but they don't actually PRACTICE it.

Myself and others predicted in October of 2008 that the administration would enter into a financial siege of sorts with those citizens who live and spend responsibly and carry little or no debt. We predicted that these people would withhold their cash in a hostile response...or spend it very selectively and then on a cash only basis...which can make it terribly difficult to track for the purpose of collecting taxes! We're seeing this now through the headlines at the top of this thread, and we see the results of it more with every day that passes. Every day that the inept, blundering idiots in top leadership in D.C. take the nation down another notch, those who have a clue become more and more hostile and are determined to keep what they've worked for.

Interestingly, on a related note, firearms and ammunition sales are about the ONLY sector showing a marked increase through this recession.

This digression will not end well.