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Showing Original Post only (View all)“Consumers Aren’t Spending Even In a Booming Job Market” [View all]
from Naked Capitalism:
Bloomberg: Consumers Arent Spending Even In a Booming Job Market
Posted on March 12, 2015 by Yves Smith
I am sure Naked Capitalism readers can clear up what a Bloomberg headline screams is an American Mystery Story, that the economy is creating more jobs, yet retail sales have fallen three months in a row, with the latest being a 0.6% decline in February versus an expected increase of 0.2%. The analysts quoted on Bloomberg blamed the terrible February weather and were confident consumer spending would pick up soon.
Of course this article could simply be Dr. Pangloss meets the job market. It somehow appears to elude most commentators that the economy is creating more jawbs than jobs, and that the labor participation rate actually fell from 62.9% to 62.8%. But analysts somehow manage to look past that. From the Bloomberg story:
The expenditures that add up to gross domestic product are coming in a lot softer than employment, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC. Why would retailers be hiring if sales are falling? Why would they be boosting hours if sales are falling and why would they be paying more?
The other factor leading to lower spending is that the saving rate is up. Well, why shouldnt the savings rate rise on a secular basis as the public realizes (if they havent already) that social safety nets, and most important of all, Medicare and Social Security, are being hollowed out?
Im thus mystified by the uniform tone of boosterism in the media about the state of the economy. In New York, where many finance reporters live, things arent all that rosy, so its hard to attribute it to being biased by local readings. Ive never seen more vacant stores than now, for instance. Even though that is driven by overly-aggresive rent increases (no joke, rents are being doubled in my hood on Madison and Third Avenues), it still destroys good business and jobs (Ive kept tabs when I can, and hardly any of the stores that are leaving due to rent increases are relocating). Similarly, salons, an indicator of discretionary spending, are hurting. The man who cuts my hair, who used to run a very successful salon, says hes had multiple offers from salon owners begging him to take up the balance of their lease. ...................(more)
http://www.nakedcapitalism.com/2015/03/bloomberg-consumers-arent-spending-even-booming-job-market.html
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I guarantee you that the ACA has negatively impacted my wife's income
taught_me_patience
Mar 2015
#55
One factor: the rising cost of healthcare is sucking every dime out of the economy
GreatGazoo
Mar 2015
#3
You're on Medicare and your union tells you what supplemental or Advantage plan you can have?
SheilaT
Mar 2015
#46
Then look into the Advantage and supplemental plans for your part of the world if you are over 65.
SheilaT
Mar 2015
#48
I believe it's because of the ACA, which requires various routine office visits be free.
SheilaT
Mar 2015
#64
Complaining about consumer spending...in a BOOMING job market? Thanks, Obama.
Fred Sanders
Mar 2015
#4
My own personal saga may help shed light on this paradox. After a prolonged bout
KingCharlemagne
Mar 2015
#5
I'm making ends meet with only one job (at the 30% pay cut), but only barely. If I want to have fun,
KingCharlemagne
Mar 2015
#20
I read somewhere quite awhile ago that 95% of the gains from this so-called
KingCharlemagne
Mar 2015
#18
The more often I live without tv, the more irritating it feels when I see one blaring away.
dixiegrrrrl
Mar 2015
#66