Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search
 

dkf

(37,305 posts)
Sun Jun 24, 2012, 08:50 AM Jun 2012

Consumer Spending Probably Stalled in May: U.S. Economy Preview

Consumer spending stalled in May, a sign the biggest part of the U.S. economy may struggle as employment and wages cool, economists said before reports this week.

Purchases were unchanged last month after a 0.3 percent gain in April, according to the median of 75 estimates in a Bloomberg News survey before Commerce Department figures due on June 29. Manufacturing is weakening, while housing shows further signs of stabilization, other reports may show.

A slowdown in payrolls and unemployment above 8 percent have damped consumer confidence, which may keep restraining sales at companies from Darden Restaurants Inc. (DRI) to CarMax Inc. (KMX) Waning demand, together with concern about Europe’s debt crisis and U.S. fiscal policy, helps explain why the Federal Reserve last week extended a program to keep borrowing costs low.

“Consumers are staying cautious,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York. “Job growth is sluggish and overall compensation hasn’t been great. The economy is decelerating.”

http://mobile.bloomberg.com/news/2012-06-24/consumer-spending-probably-stalled-in-may-u-s-economy-preview?category=%2F

27 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Consumer Spending Probably Stalled in May: U.S. Economy Preview (Original Post) dkf Jun 2012 OP
People not spending money is a good thing. The rate of savings in this country is way too low. RB TexLa Jun 2012 #1
Right now, we need consumers to spend. And, fingers crossed, cheaper gas will help. MrTriumph Jun 2012 #2
So the fact that people fear losing their jobs doesn't matter to you? They should spend their money RB TexLa Jun 2012 #3
Business expansion is a key to job creation. That is agreed upon by Ds & Rs. MrTriumph Jun 2012 #4
You did leave off one person who benefits from saving, the saver. But it's pretty clear you don't RB TexLa Jun 2012 #5
Talking across each other nadinbrzezinski Jun 2012 #6
Perhaps if the PEOPLE were bailed out, they would spend, and the economy would recover. Huey P. Long Jun 2012 #21
Well in effect what you are asking nadinbrzezinski Jun 2012 #22
As a former banker I can tell you. Chan790 Jun 2012 #14
Trust me, I know nadinbrzezinski Jun 2012 #17
While it is true that saving. sendero Jun 2012 #18
No, no, spend, spend, you are thinking selfishly wanting a safety net of savings. People RB TexLa Jun 2012 #19
Read post number six nadinbrzezinski Jun 2012 #23
I'm fully in support of that... Chan790 Jun 2012 #24
At a macro level I will take it a step further nadinbrzezinski Jun 2012 #25
I don't pay any fees on any of my savings accounts. I pay commisions when I buy or trade securities RB TexLa Jun 2012 #26
Of course you do. Chan790 Jun 2012 #27
No, they should spend to stimulate the economy to forestall job-cuts and layoffs. Chan790 Jun 2012 #13
Which is why the government needs to spend.. girl gone mad Jun 2012 #7
But removing the debt is good for the future, but I know sacrifice is no longer a value RB TexLa Jun 2012 #8
Not in the short term, unless you like a depression nadinbrzezinski Jun 2012 #11
Which is why private sector spending should be encouraged. dkf Jun 2012 #10
Good luck with that one nadinbrzezinski Jun 2012 #12
They ONLY get the break it they invest it. dkf Jun 2012 #15
Again, look at tax rates and how they correlate nadinbrzezinski Jun 2012 #16
Money Talks BrendaBrick Jun 2012 #9
Catch-22. The economy won't pick up unless people buy more.. Tierra_y_Libertad Jun 2012 #20

MrTriumph

(1,720 posts)
2. Right now, we need consumers to spend. And, fingers crossed, cheaper gas will help.
Sun Jun 24, 2012, 09:58 AM
Jun 2012

As a small business owner, what is most critical for our crippled economy is to get consumers spending up. That will create jobs.

Savings helps only so much as it is then reinvested in American businesses. With our current lack of banking restructions, instead much of it is routed into commodities speculation which actually hurts our economy. And, as an aside, how much of savings is routed into loans to assist companies to relocate manufacturing overseas or outsource?

Until we address these bigger issues- and it appears neither party is interested- consumer spending is all we've got.

 

RB TexLa

(17,003 posts)
3. So the fact that people fear losing their jobs doesn't matter to you? They should spend their money
Sun Jun 24, 2012, 12:56 PM
Jun 2012

so you can have?

MrTriumph

(1,720 posts)
4. Business expansion is a key to job creation. That is agreed upon by Ds & Rs.
Sun Jun 24, 2012, 02:16 PM
Jun 2012

Hey, bonehead, listen up: In 2011, my business picked up due to new product introductions. These products were developed and made right here in the USA. And I'll add for your enlightenment that my business has never received a handout from any level of government.

The point is, to handle the increased business my company hired an extra person. And if, business continues to increase it may enable my company to hire another. That's how it works and has always worked for small businesses.

If you want to be pissy, take it elsewhere. DU deserves better than your getting personal tripe.

 

RB TexLa

(17,003 posts)
5. You did leave off one person who benefits from saving, the saver. But it's pretty clear you don't
Sun Jun 24, 2012, 05:03 PM
Jun 2012

care for people doing that.

 

nadinbrzezinski

(154,021 posts)
6. Talking across each other
Sun Jun 24, 2012, 05:10 PM
Jun 2012

what you are facing is the paradox of savings, noted first during the Great Depression.

You need people to spend to stimulate the economy... that is a reality, but people are rational self interested critters that will hold tighter to their money during economic downturns, increasing the hole.

To break this little vicious circle, that is where Keynes spoke of GOVERNMENT short term investments and job creation, which helps to break that vicious circle.

It is the conflict between macro economics, I need people to spend... in order to create demand, that will in turn create jobs, and micro economics, times are tough, I need to hunger down, and save.

 

nadinbrzezinski

(154,021 posts)
22. Well in effect what you are asking
Sun Jun 24, 2012, 09:57 PM
Jun 2012

for Keynseian economic policies. You bail out the people with a series of policies like a WPA, a Bank Holidays and things like that.



Which is exactly what brought the country out of the depression, and then we went into the 1937 mistake... like oh NOW...

 

Chan790

(20,176 posts)
14. As a former banker I can tell you.
Sun Jun 24, 2012, 06:46 PM
Jun 2012

If you're saving right now you're hurting yourself more than you're benefiting. We're charging more in fees on balances below 5K than we're paying in interest...let me make that clearer, we're charging you for not spending, we're charging you for saving. We've cut our CD rates to match the rate we pay on savings. We want the money out of deposit...when it's circulating, it's creating more profits for us because businesses come in and take loans for infrastructure, people come in and take mortgages, our business clients do more business and we bill them for services by volume, the economy improves and the interest rates go up.

We're money-grubbing and evil, yet even we know the economy is going to shit the bed again unless we can force people out of saving.

DON'T SAVE!

sendero

(28,552 posts)
18. While it is true that saving.
Sun Jun 24, 2012, 09:03 PM
Jun 2012

... is not paying off at the present time, if you lose your job and have no savings well it's going to get really ugly really fast.

The Fed has been trying but they will fail. Nobody is going on a buying binge with this much uncertainty in the economy. Well, maybe a few idiots, but that is all.

 

RB TexLa

(17,003 posts)
19. No, no, spend, spend, you are thinking selfishly wanting a safety net of savings. People
Sun Jun 24, 2012, 09:11 PM
Jun 2012

want and they want NOW! SPEND
 

nadinbrzezinski

(154,021 posts)
23. Read post number six
Sun Jun 24, 2012, 10:02 PM
Jun 2012

bankers are folks looking at the macro economy.



You and I are looking at the micro economy.

Only way to break this... is with a good amount of government spending... like oh hiring police, fire, teachers, road department people... things like that

 

Chan790

(20,176 posts)
24. I'm fully in support of that...
Mon Jun 25, 2012, 12:06 AM
Jun 2012

they don't let me make decisions. What's more, we have no ability to compel government expenditures.

I was a branch partner. All we can do at the branch level is public-facing...we say "Take a business loan, the rates are great!" they say "F**k No! My sales are down and I have no idea when they're coming back up." Short of that, we get the notice from HQ in Atlanta to cut savings and CD rates to .05% (A nickel per $1000 on deposit per year compounded daily.) and raise the fee for deposit accounts with balances under $5000 to $9/month.

If you're committed to saving (like RBTexLA is), you're better off using the first deposit bank of mattress because at-least you have what you saved. Not only do I advocate not saving (beyond a rainy-day fund), I can't in good faith tell people it's a good idea when you deposit $200 and a year later there's $92.07 with interest because we took $108 in fees. (It's fucking thievery. I used to go to work and feel like a crook.)

It's the big fish corporations hoarding, the average small business owner I saw was as tapped out as the public. The only thing that is going to unclench the economy at this point is the compelled transfer of a massive quantity of wealth from the top to the bottom and government expendatures... two things that are not even on the radar. Blasphemous as it is, I'm forced to agree with Reagan...we should have ended Cap Gains classification and taxed them as regular income. They wouldn't be hoarding if they had to pay 40% on their gains, they'd be spending to escape taxation.

 

nadinbrzezinski

(154,021 posts)
25. At a macro level I will take it a step further
Mon Jun 25, 2012, 12:24 AM
Jun 2012

we do not tax them enough... yes there is correlation. Not only end cap gains... but I would also raise taxes on the top marginal rates to not just the Clinton Years... shoot me now, not just the Reagan years, but the Kennedy years.

But we are talking macro versus micro econ.

The small fish and John Q Public are trapped in the micro economy, while the macro econ measures we need to unclench this... are not even in the radar.

By the by, I also advise people to move from a regular bank to a credit union. The only reason is... the fees... if you need to keep a rainy day fund <--------- are far less.

By the way, that tax rate and end of cap gains... that will actually force large fish to either leave the country (I am sure they're thinking about it), or to protect themselves invest... one way to hide them from evil guv'ment folks and force that hoarding to be circulated.

 

RB TexLa

(17,003 posts)
26. I don't pay any fees on any of my savings accounts. I pay commisions when I buy or trade securities
Tue Jun 26, 2012, 07:55 PM
Jun 2012

And I strongly disagree with you on the capital gains issue.
 

Chan790

(20,176 posts)
27. Of course you do.
Tue Jun 26, 2012, 08:43 PM
Jun 2012

You also probably disagree with my support of the transaction tax for Wall St.

We have no common ground on fiscal policy. That much is obvious at this point.

 

Chan790

(20,176 posts)
13. No, they should spend to stimulate the economy to forestall job-cuts and layoffs.
Sun Jun 24, 2012, 06:40 PM
Jun 2012

Unfortunately, the way our economy is set-up currently...saving is always going to be bad in the near-term. Americans shouldn't save. Some people are going to harp on the savings rate anyways...but Americans still should not save. Savings interest rates are low to discourage saving intentionally...push the money out of savings and into the marketplace.

I recently left a bank and we were talking about charging people even more for savings than we already do because we don't want the money on deposit, we have nobody to lend it to anyways and we don't even want to pay the pittance of interest we're currently paying for economically-dead deposit funds. (Currently if you have less than $5000 on deposit with my former employer, we're charging more in fees than you're earning in interest. You're breaking even until you have the $25K to open a Money Market Account.)

They however should cut-up their credit cards and pay down debt if possible. I shock people that I can live comfortably on $25K...it's because I have nearly no debt. I have no savings either, saving money is neither helpful or economically advantageous. There is more economic utility to capital investment and spending on items of utility ATM.

girl gone mad

(20,634 posts)
7. Which is why the government needs to spend..
Sun Jun 24, 2012, 05:22 PM
Jun 2012

and your calls for austerity are completely misguided.

If the private sector wants to net save, the public sector needs to net spend to keep the economy in balance. If this doesn't happen, we end up in a deflationary spiral which creates a lot of misery and leaves our country poorly positioned to innovate and improve.

 

RB TexLa

(17,003 posts)
8. But removing the debt is good for the future, but I know sacrifice is no longer a value
Sun Jun 24, 2012, 05:31 PM
Jun 2012

Americans believe in.
 

nadinbrzezinski

(154,021 posts)
11. Not in the short term, unless you like a depression
Sun Jun 24, 2012, 06:33 PM
Jun 2012

Ask Hoover... that is what you are asking for... it worked wonders, didn't it?

But, but, that is the past... ask the Brits. They are following YOUR FORMULA and they are officially in a recession again... silly wabbits, they will push the country to a depression at the pace they are going.

 

dkf

(37,305 posts)
10. Which is why private sector spending should be encouraged.
Sun Jun 24, 2012, 06:29 PM
Jun 2012

Shouldn't repatriation tied to investments be encouraged as one of the best avenues to boost spending?

 

nadinbrzezinski

(154,021 posts)
12. Good luck with that one
Sun Jun 24, 2012, 06:35 PM
Jun 2012

we did that once already in recent memory... and not one iota of spending from the private sector. IN fact, they are SITTING ON TRILLIONS as I type this. Tax the bastids, then they will invest it, to protect it from the e'vil Guv'ment!

You doubt this? Look up the numbers of actual, well investment and how they correlate with taxation rates.

 

nadinbrzezinski

(154,021 posts)
16. Again, look at tax rates and how they correlate
Sun Jun 24, 2012, 08:39 PM
Jun 2012

and the break... you kid me... Republicans and Conservative Democrats will do that and pass such a bill.

This is probably one of the best jokes I have read on DU in close to ten years. It is funny.

BrendaBrick

(1,296 posts)
9. Money Talks
Sun Jun 24, 2012, 06:21 PM
Jun 2012

though a bit off topic (in a way)...in another way - not so much:

Here's one possible solution to spend...if and when you have to spend - to seriously consider supporting Costco, Mercadona, Quick Trip & Trader Joe's for these reasons and as discussed here:

http://www.democraticunderground.com/1002850799

Together we can and will make a difference, (even if we don't really think we can)...we really can here folks!!!!!

BELIEVE IT.

Money Talks.

 

Tierra_y_Libertad

(50,414 posts)
20. Catch-22. The economy won't pick up unless people buy more..
Sun Jun 24, 2012, 09:15 PM
Jun 2012

but the buyers are either broke or saving because of the bad economy.

And, they remember that buying a lot of stuff on credit is exactly what caused the economic disaster they're struggling with.

Of course, the government could pump some money into the economy by stopping the lost wars and taxing the corporations and rich. But, the people who could do that are on the payrolls of the rich and corporations. Catch-22 again.

Latest Discussions»General Discussion»Consumer Spending Probabl...