Consumers shutting down as US economy deflates

CNBC ^ | 14 October 2015 | Jeff Cox

[Lorianne]

The math is pretty simple: A lack of purchasing power for consumers has led to a lack of pricing power for companies.

When it comes to the U.S. economy big-picture outlook, the ramifications are more complicated, and not particularly pleasant.

Wednesday's producer price index reading, showing a monthly decline of 0.5 percent, demonstrates a larger problem: At a time when policymakers are hoping to generate the kind of inflation that would indicate strong growth, the reality is that deflation is looming as the larger threat. Declining prices often would be treated as a net positive by consumers, but income weakness is offsetting the effects.

Even Wall Street is feeling the heat. Prices for brokerage-related services and financial advice dropped 4.3 percent in September, accounting for about a quarter of the entire slide for final demand services.

[FourtySeven]

Isn’t this good news? After all this can only mean the cheap stuff from China will only get cheaper. And that’s a good thing right? < /sarc >

[FourtySeven]

To get pricing power (inflation), you have to kill off the marginal companies. The zombies must die.

Shoot em in the head! Only way to be sure. (And you also have to burn the body).

[dragnet2]

That not longer works but some hard core frauds still run with it.

Those who use to run around ranting about isolationist, were proven to be either liars, frauds, or simply uninformed suckers with short attention spans. Btw, I know the piece of work you refer to. I have zero patients for that type of fraud.

[Chickensoup]

One thing that I notice is that boomers are not buying because they don’t need to anymore, all my friends are decluttering, unloading, and only buying what they need. When a large portion of the population gets old, there is not much that they want to buy.

They are also giving stuff to their kids. Diningroom sets, bedroom suites, rugs glassware.

They are also yard sale-ing things.

[The Toll]

Everyone knows what’s coming. The Prepper Economy is the only Economy.

Been to a Gander Mountain, Bass Pro type place lately? No shortage of customers there.

[sparklite2]

“I have zero patients for that type of fraud.”

What are you? An Obamacare-only doctor?

[dragnet2]

Playing stupid again sparky? You play that role so well.

[sparklite2]

Did you run out of patients (sic) again?

[zzeeman]

Yup, you’re right, there is a lot more water in anything that they can put it in.

[Texas resident]

I disagree. The Demonrats and their 1% backers know exactly what they are doing. In communist countries, there are two classes. 1% uber wealthy and their government buds, and 99% trapped in poverty. Insures one party rule and insures that they can do whatever they want with no repercussions.

We are headed that way. Fast.

[Georgia Girl 2]

Yep. Everything Obuttlick has done in the past seven years has been aimed at destroying the middle class and creating a proletariat underclass. Hence the 29 hour work weeks etc.

[Georgia Girl 2]

LOL! Or as I call it stupid trade.

[gogeo]

I am so screwed.

Depending upon context...

[Mad Dawgg]

When Daughter went back to college this year she transitioned from a dorm room to a apartment that is shared with 4 other students. She needed some storage furniture and found these cloth basket things that fit on shelves that fold down when not in use. She got them on sale for like a buck a piece but the storage shelf they fit in was waaaay over priced. We went through our building and found an old shelf with wheels that had been left in one of our rentals. It needed some minor reworking which included a couple of shelves removed and reinstalled to accomodate the baskets some sanding and new paint. Total cost was like 12 bucks. The shelf in the store cost almost 300 bucks and was made of pressed board. Daughter had a blast working on the project and was proud of the unit once it was done.

We saved almost 300 bucks AND had fun doing it. And that seems to be our trend lately. Can we make it or fix it or repurpose and old item to fit a new need. Saves us lots of cash and it's fun to do.

[Chickensoup]

Reminds me of the seventies.

[dragnet2]

For 30 years fat corps have off shored tens of hundreds of thousands of jobs and entire industries to maximize THEIR profits.

While at the same time those they bought off in D.C. flooded the country with tens of millions of low wage illegal workers.

WTF did they think would happen to the country sparky? Is there anyone who actually believed this was a good thing?

Anyone?

[sparklite2]

I’m trying to remember ... how does
the US rank among other countries
in the corporate income tax rate?

[dragnet2]

I say shut it all down sparky!

It’s what the greedy fat corps deserve. They wanted off shore entire industries and millions of jobs to Communist China? The same corporations who wanted millions of low wage illegals working here. It’s what the wanted. Low wage labor!

The same corporations who have none, zero, zip allegiance to America?

Profits regardless of consequences while the tax payers take the hit to support they’re employees here? They have no problem paying 1997 wages in 2015? No problem sparky. The same corporations who buy the corrupt professional politicians in DC so they’ll do what they’re told? No problem!

So I hope they don’t mind me not investing in and contributing as little as humanly possible to their candidates and products sparky. It’s a fun endeavor too. I’ve turned it into a wonderful hobby.

[sparklite2]

I’m glad you’re happy.
Oh, I looked around, and US companies pay among the highest two or three rates of income tax in the world. Good reason to offshore.

[dragnet2]

Those poor corporations...Say sparky, are they not the guys who the filthy rich celebrities rent jets from? Oh that’s right! Are they not the guys who’s personal profits and incomes gone through the atmosphere while those actually working for them eat sh*t with decades old stagnate wages decimated benefits, while middle America declines into a cesspool?