I doubt it's even as high as -10% now. Granted I've never been much of a shopper (always frugal), but just looking around, a lot of stores look deserted or close to it. I'm making more mercy buys lately, like yesterday I bought a slice of banana bread and orange juice at an otherwise empty independent coffee shop, whereas normally I'd not pay $4 for that. I may have to stop going to places like that.
It's only a matter of time before this economy is widely recognized as a depression. Having fallen this far this fast, and gov't obviously hurting more than helping (even Obama), it's a safe bet this one will be worse than the last one.
One thing is for certain - this is not an inflationary indicator.
there are no buyers.
5% YoY reduction in PCE, where that makes up 70% of a $14 trillion economy = $500billion in spending that has disappeared
That's slightly less than the planned spending over the next 2 years from the stimulus plan. Wonder if that is the math they are using to get to the number in the budget.
I doubt it's even as high as -10% now. Granted I've never been much of a shopper (always frugal), but just looking around, a lot of stores look deserted or close to it. I'm making more mercy buys lately, like yesterday I bought a slice of banana bread and orange juice at an otherwise empty independent coffee shop, whereas normally I'd not pay $4 for that. I may have to stop going to places like that.
It's only a matter of time before this economy is widely recognized as a depression. Having fallen this far this fast, and gov't obviously hurting more than helping (even Obama), it's a safe bet this one will be worse than the last one.
People are beginning to realize what a ripoff most retail is. No one needs 'banana bread' and 'cafe lattes" anyways. Back to the farm!
One thing is for certain - this is not an inflationary indicator.
there are no buyers.
5% YoY reduction in PCE, where that makes up 70% of a $14 trillion economy = $500billion in spending that has disappeared
That's slightly less than the planned spending over the next 2 years from the stimulus plan. Wonder if that is the math they are using to get to the number in the budget.
Very possible. However the solution to the downturn is not more spending, but paying down debts, de-leveraging. The most we "stimulate", we just pass the buck along to the next cycle. Until you can't do it anymore because hyperinflation means the goobermint can't print anymore "money".
I suspect this is credit card expenditure data. How else would they be able to keep track?
When economists say that consumer spending is X amount of the economy they must mean credit spending.
We have established wages have stagnated in the past ten years, but consumer spending has increased.
So yes, if you have a job you are holding onto money. if you lost a job you are spending cash. Those that are without jobs using credit are a problem for a future time.
Comments
It's only a matter of time before this economy is widely recognized as a depression. Having fallen this far this fast, and gov't obviously hurting more than helping (even Obama), it's a safe bet this one will be worse than the last one.
there are no buyers.
5% YoY reduction in PCE, where that makes up 70% of a $14 trillion economy = $500billion in spending that has disappeared
That's slightly less than the planned spending over the next 2 years from the stimulus plan. Wonder if that is the math they are using to get to the number in the budget.
People are beginning to realize what a ripoff most retail is. No one needs 'banana bread' and 'cafe lattes" anyways. Back to the farm!
Very possible. However the solution to the downturn is not more spending, but paying down debts, de-leveraging. The most we "stimulate", we just pass the buck along to the next cycle. Until you can't do it anymore because hyperinflation means the goobermint can't print anymore "money".
When economists say that consumer spending is X amount of the economy they must mean credit spending.
We have established wages have stagnated in the past ten years, but consumer spending has increased.
So yes, if you have a job you are holding onto money. if you lost a job you are spending cash. Those that are without jobs using credit are a problem for a future time.