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Gallup Slams Lid On Hopes for US Economy
Wolf Richter www.wolfstreet.com www.amazon.com/author/wolfrichter
Consumers are “straining against rising prices on daily essentials to afford summer travel, dining out, and discretionary household purchases – the kinds of purchases that ordinarily keep an economy humming.” That’s what Gallup found when it used a new survey to dive deeper into consumer spending.
Its regular monthly survey has been mixed. The average dollar amount consumers spent in June swooned to $91 per day from $98 in May, after a crummy January-April period ranging from $78 to $88 per day. The May spurt seems to have been an outlier that had given rise to a lot of speculation consumers would finally hit “escape velocity,” now obviated by events. But from 2012 until late last year, the averages had been rising.
So Gallup dove deeper into the issue with its new survey conducted in mid-June to sort through what consumers are spending more or less money on. And what it found was that they’re buying a little more – “just not the things they want.”
They’re spending more on things they have to buy, and in many instances they’re spending more in these categories because prices have jumped. At the top of the list: groceries.
- Groceries: 59% spent more, 10% spent less.
- Gasoline: 58% spent more, 12% spent less
- Utilities: 45% spent more, 10% spent less
- Healthcare: 42% spent, 8% spent less
- Toilet paper and other household goods: 32% spent more, 5% spent less
- Rent, the biggie: 32% spent more, 9% spent less.
These categories are household essentials. They’re on top of the priority list. And in order to meet the requirements of these items, consumers are cutting back where they can. Gallup found that “the increasing cost of essential items is further constraining family budgets already hit hard by the Great Recession and still reeling from a stagnant economy.” Hence, the less essential the expense, the more it got cut. Here is the bottom of the list, which explains part of the recent retail woes:
- Retirement savings: 18% spent more, 17% spent less.
- Leisure activities: 28% spent more, 31% spent less
- Clothing: 25% spent more, 30% spent less
- Consumer electronics: 20% spent more, 31% spent less
- Travel: 26% spent more, 38% spent less
- Dining out: 26% spent more, 38% spent less
Then there are summer travel plans, so future spending. They show just how bifurcated the economy has become. On the positive side of the ledger, 69% of American plan to travel this summer, the highest since 2006, and far more than the 52% in 2009 during the depth of the Great Recession. And those travelers intend to spend more on transportation, food, lodging, and entertainment than last year, as Gallup put it, “further pressuring their already-strained budgets.”
But about one-third plan to spend only one night or less away from home. So not exactly a long vacation. And 36% are planning to travel less than last year, even worse than in the terrible year of 2010, when 33% were cutting back from the already terrible year 2009.
And what about “escape velocity” in consumer spending? Despite what Wall Street economists and other hype mongers have been predicting for five years in a row, Gallop soberly puts slams the lid on those speculations:
If there was any doubt that the U.S. economy is still struggling to get back on its feet, the results of this poll reinforce that reality. Because consumer spending is the lifeblood of a healthy economy, these findings suggest that discretionary spending still has a ways to go before it will fuel the kind of economic growth Americans have been hoping for.
Americans who are struggling to make ends meet, and who cut discretionary spending in order to pay for essentials, form a large part of the middle class. But there are others who don’t have these problems, who are doing well. A dichotomy that shows up in “dining out.”
“Dining out” made the bottom of the list: 38% of the people cut back, while only 26% spent more on it. The restaurant industry should be groaning in pain.
But someone must be eating out. The Restaurant Performance Index (RPI) for May, released on June 30, rose again, “driven by stronger sales and traffic levels and an increasingly optimistic outlook among restaurant operators.” May was the third month in a row that the Current Situation Index was above 100, and therefore in expansion mode.
Smell of conundrum? Nope. But a sign of America’s dual-track society. The 26% of consumer who spent more on dining out might well belong to that group whose median household income exceeds $50k a year. They feel flush and their confidence has soared to post-recession highs. But the confidence of consumers making less than $50k a year has barely moved up from the recession bottom. And the gap between the two is at a record high. Read…. This Chart Truly Depicts What’s Wrong With the ‘Recovery’ in America
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Simplify & Streamline
Congress knows this is a conservative concept.
But every time legislation comes forward it is "Pork Barrel" time and Lobbyists line up to Re-Write the Bill.
So I agree with above comments directed at Anyone that wants to add more laws & legislation without determining if "Total Reform is Needed"
-I.E End the FED
-I.E. Flat Tax with a few deductions to incentivize buying a house, paying for education, paying for health care, buying gold & silver for Retirement
-I.E. Bankrupt TBTF Banks lose Banking Powers, Federal Contracts, and face restrictions on exporting capital to gamble in London, and face restrictions on mixing Individuals Deposits with commercial & Investment Activity, No chance to issue EBT Cards, No Dealer Preference on Issues of US Treasuries, and no Lobbying Congress
Simplify Legislation "End Lobbying"
Simplify Politics "Get Money of Out it and End Gift Giving"
Simplify Individual Income Taxes, so we don't have to pay someone to figure it out.
Simplify Financial Instruments and you can trim down the Finance Industry, tax Industry, and Accounting Industry.
Earlier this week, either on NPR's morning newscast or on the 'Marketplace' radio program, there was a rare segment about price increases for various food items during the past few years. The tone of the short segment, though, was of amusement, as if it were funny that the prices of ordinary things was going up. Very strange.
No, not strange, its pure propaganda masquerading as 'intellectual, thought provoking' news ... I heard a 'debate' on NPR regarding insider trading a few years ago being good for the economy. The guy debating that it was wrong seemed dumbfounded that he was being run over by the pro-insider-trading 'debater'. I shut off NPR right after hearing the nonsense and haven't listened to it since.
Yes, I used to like to listen to NPR but seems lately it has become a propaganda machine like the rest of MSM.
People who think they're educated because they have college degrees like to think they're informed because they listen to NPR. (n.b. I had a much different college experience than what seems the usual, so I'm not knocking what college can be).
The junker should know that I contributed to NPR for 20years and then stopped when it became blindingly obvious that its reporting of the financial crisis is fundamentaly compromised, and that all its programing functions as propaganda for TPTB. One has the impression that Edward Bernays is reincarnated as director. I wonder if the junker's livelihood is associated with NPR.
What else would one expect from corrupt government funded media?
more wood pulp please
--1....one must ask correctly..... 'MOAR wood pulp please'
yes please: would be good for downsizing all those fatties including my own unsightly gut; would also reduce the occurrence of colon cancer
Ask and ye shall receive.
Heck ... you don't even have to ask...
Now let's have a 'feel good' article comprised of eating your own fresh produce that you grow (if you don't get arrested for it if you live in town) and how you can really spice up a plate of cheap beans (until everyone's eating beans and the traders realize they are too cheap).
Pretty much fkd.
Maybe something about breaking into and rerouting your sewage to promote more growth in the survivalist garden?
Consumers are so freak’n tapped out it ain’t funny. Foot traffic in malls is for amusement only or to get out of the heat or out of the house away from the screaming kids. I watched the handful of “consumers” in the mall today who actually tried to purchase another sweater, blouse, etc … grunting, huffing, mumbling when their credit cards are rejected and they have that surprised look on their faces.
The private sector, Merikan Middle Class consumer is a relic, a memory, a thing of good times turned bad. It’s kind of sad but very expected at this point.
Beans, HA! more saw dust gruel please for the sheeplatariat lord Obamessiah?
Didn't read the article. I have been posting FRED Charts for 3 Months now.
I saw this coming like I saw the 2008 Stock Crash.
Actually I went to Business School.
I called the problem in like 2002 when GWB was working up his War on Iraq or whatever the date was. Maybe It was 2004 when I saw the Build up... Doesn't matter. The Logistics of War overseas is fucked. You lose if if you don't win in a year. That in Essence is Logistics when your country is over 1000 miles away. Sorry Dick Chenay as a Logistician, as a Warrior, as a Tactician, "You Suck". Pass that on to Wolfowitz.
Someone said:
If you were a good economist you would be rich.
I am not a good Economist in those terms.
So I may misword the whole thing.
A) the Economy was going to Take a Big Hit since 2005 when the Housing Market Topped out, but the Fed Was Silent and caused people to lose money
B) Bail Out was for wussies in TBTF Banks, but had no strings so they gave bonus money to the dicks that fucked the nation, and btw they can pull out capital and go to Asia or Europe any time
C) All Fiscal policy and Monetary policy failed
D) You aint in the inside.
It's NOT rocket science.
Perpetual growth on a finite planet is NOT possible. There is no "fix" that makes this "work," not as long as the underlying premise is growth.
All wars are [ultimately] about resources: unable to pay to import? invade and "liberate" that which you require.
US went from a net exporter of oil to a net importer. And given that oil is the most valuable commodity (it's PURE work, which translates to POWER) this was a HUGE swing. 1971, that's the year that the US essentially went bankrupt; only through LOTS of trickery (with USD being the world's reserve currency) was this pushed into the closet and, well, the stench never was going to go away...
On another note, I was just informed my medical insurance is being cancelled because it does not conform to Obama care standards. My $265/month catastrophic policy will be replaced by a $675 policy. But on the bright side, the insuurance executives getting all my money can spend it to stimulate the economy. Doen't that make me better off?
You initials will be added to that goldleaf decorated toilet seat they just ordered!
Needless to say, you sir are a patriot.
Bureacracy laden obamascare creates windfall profits for behemoth bureaucratuc impersinal hospital systems by driving all care to the outrageous expensive , inefficient hospitals. Insurance get windfall profits by jacking up rates, increasing deductible up to $12K, and ratcheting down coverages. Physicians are being replaced by cheaper mudlevel providers. Phoenix VA hospital bureaucratic quality healthcare coming to your neighborhood soon but the good news is ur corrupt elected ruling elite have exempted themselves from this nightmare POS Gummint program. Aint you lucky to be living under them..
BIG PHARMACEUTICALS WILL MAKE AND SPEND MORE TOO - The rich have the weight on their sholders and a heavy burden to keep this economy afloat. They need our cash to build more second and third homes, private jets and yachts. That creates jobs -mainly for Chinese and foreigners -but the more money the rich make, the more trickles down to the middle calss -rich hire more domestic help (sometimes legal Americans) they hire accountants, lawyers, clerical staff. 4 star hotels and fancy restuarants, hookers and mistresses all benefit. The more people lose their jobs, the more end up going to prison and getting tied up in the legal system. That creates more jobs. Financially stressed people get depressed and divorced -this creates jobs for all kinds of people. People getting food stamps creates thousands of new jobs for government employees. Debt collectors flourish. I could go on and on. Don't knock the rich. They live their lives in constant fear and worry that the angry, hungry mobs will one day descend upon their neighborhoods. This provides a boon to the home security industry - again, more jobs.
I would invest in pitchforks -that's all people will have when and if the rich successfully disarm the rest of us of our guns.
The "Affordable Care" Act and the "Federal" Reserve Act are the same damn things.
Legislation crafted by cartels and foisted upon an ignorant Congress who never read the bill, by staff and lobbyists to swindle the US citizenry.
Heard municipalities are bringing back Debtor Prisons.
Wonder if Obama Care would lead to Prison for Poor people.
Actually seems like ACA will collapse the Economy as one of the final expenses getting hiked up, while we carry $60 Trillion of Debt in the USA now.
-housing
-Cars
-Health Care
-Child Care
-Taxes (they goin up)
Old Chinese saying: "If my economy is taken out; I no can pay for Chinese take-out".
But me like Chinese take out they are the only few things that I can afford to eat with fresh veggies.
Sweet! No wonder they put their knowledge in a cookie!
http://www.weeklystandard.com/articles/disorder-border_796395.html
http://www.presstv.com/detail/2012/08/10/255432/us-police-now-israelidhs...
http://www.youtube.com/watch?v=5IJeemTQ7Vk
The Plan
http://www.wolf-pac.com/the_plan
Cities With the Most Abandoned Homes
While there are a variety of options for homeowners in foreclosure,many have chosen to cut their losses and abandon their property. The housing market has been improving across much of the nation. However, some cities still have a long recovery process ahead of them as the market deals with a glut of homes in foreclosure, which can often stay in the system for several years. Meanwhile, many of these remain vacant.
Read more: Cities With the Most Abandoned Homes - 24/7 Wall St. http://247wallst.com/special-report/2014/07/11/cities-with-the-most-aban...
http://research.stlouisfed.org/fred2/series/EXHOSLUSNEM495S (way down, 2014-04: 600,000 Number of Units), Existing Home Sales in Northeast Census Region©
http://research.stlouisfed.org/fred2/series/EXHOSLUSMWM495S (Way down from 1999, 2014-04: 1,030,000 Number of Units), Existing Home Sales in Midwest Census Region©
http://research.stlouisfed.org/fred2/series/HSN1FNE (way down, 2014-04: 22 Thousands) New One Family Houses Sold in Northeast Census Region
http://research.stlouisfed.org/fred2/series/HSN1FW (way down, 2014-04: 92 Thousands) New One Family Houses Sold in West Census Region
http://research.stlouisfed.org/fred2/series/HSN1FS (way down, 2014-04: 235 Thousands) New One Family Houses Sold in South Census Region
http://research.stlouisfed.org/fred2/series/HSN1FMW (like 1980s rates, 2014-04: 84 Thousands) New One Family Houses Sold in Midwest Census Region
http://www.youtube.com/watch?v=x4o-TeMHys0