Spending More Money Because Things Cost More
Why Did Consumers Spend More Money In June?
So…Why did consumers spend more money in June? Unfortunately, it’s not because consumers are feeling confident in the economy (nor should they). It seems that the reason consumers spent more, was because the prices of just about everything has increased.
Here is a clip from The Associated Press…
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Have you been spending more money? Why is that? Is it because you have more money to spend, or because the things you have to buy cost more money? Let me know in comments.
From The Wall Street Journal…
Consumer spending inched up in June, somewhat boosted by the tax rebates provided by the economic stimulus package U.S. policymakers created earlier this year.
Still, economists say the personal income data the Commerce Department released Monday are pretty negative, suggesting that the rebates, alone, aren’t capable of resuscitating the ailing economy.
This is from an article in The New York Times…
Consumers spent more in June, but only because the things they buy cost more.
Driven primarily by energy and food prices, inflation grew 0.8 percent over May, the biggest monthly increase since September 2005, the Bureau of Economic Analysis reported on Monday. Spending, by comparison, grew just 0.6 percent in June.“Inflation is intensifying, and that is the main source of weakness in consumer spending,” said Dean Maki, chief United States economist at Barclays.
Sky-high food and energy prices continue to drive overall prices. Without food and energy, “core” inflation grew at a more modest level of 0.3 percent over May. The prices of nondurable goods — the most current measure of food and energy prices, including items like clothing — recorded the biggest increase for the 12 months that ended in June since July 1981.
From d-day…
Inflation, in fact, rose at its highest one-month level since 1981. That’s going to go down somewhat in Juy, because gas prices have decreased. But we’re still looking at stagnant wages, increasing unemployment, and no end in sight to the housing crisis. The economy is in the shitter.
From Pamela Leavey at The Democratic Daily…
The NY Times reports today that although the “first wave of Americans to default on their home mortgages appears to be cresting,” a second, far larger group of potential loan defaults is looming, because now, even “homeowners with good credit are falling behind on their payments in growing numbers.”
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What do you think about consumers spending more money? Are you spending more? Let me know in comments.
