The Middle Class Spending Crash Explained

Well Surprise Surprise Surprise Boys and Girls, The Gang of Einstein's over at The Wall Street Journal are finally coddling on to the fact that there's just not as many Discretionary Transactions flowing through the economy. So, they have wondered why this is happening.

It's because everything we need to survive is so Darned Expensive! Rents/Mortgages, Medical Care, Food etc. has gone through the roof!!!

Sp, they have been hoping to prime The Spending Pump with their Great Black Friday.Cyber Monday Deals/ Well, I've got Mad News for The Retailing Corporations (Monetary Extraction Devices). People are Tapped Out! Yeah, we'll bit at The Little Bit of Chum they throw in the waters to hopefully restart a consumer feeding frenzy and once those items are gone, then so are we. Adios A-Holes .

From what this article says, even The Top Ten Percent which had been supporting Consumer Discretionary Spending is now shrinking down to Five Percent, Oops!

So Waddya Think ATS, Is this article On The Money (Remember That Stuff, LOL) Or, have they got this ALL WRONG?

Lettuce Know what you think, All Comers, Answers and Complaints will be dealt with in The Usual Way (with A Friendly Respectful Answer).

Mods, I've put this in The Global Meltdown Section, you Guys and Gals Know The Drill if this needs Moving/

Thanks Everyone for taking a look at this and especially Our ATS Compadres with Replies. Peace Y'ALL Arjunada.


With Black Friday sales plunging and Cyber Monday growth slowing, it appears the chicken of stagnant wages and debt-saturation are coming home to roost for a massacred middle-class America. However, as WSJ reports "we are buying less stuff," because the basic costs of necessities such as healthcare, food eaten at home, rent, education, and cellphones have surged.

As The Wall Street Journal reports,

Consumer spending continues to make up just over two-thirds of the U.S. economy. But where households spend that money has shifted significantly.

To see how it has moved, the Journal analyzed Labor Department data on 2013 out-of-pocket spending for the middle 60% of the population by income—households earning between about $18,000 and $95,000 a year, before taxes.

The data show they are losing ground. Overall spending for the group rose by about 2.3% over the six-year period from 2007, even as inflation totaled about 12%. At the same time, income for the group stagnated, rising less than half a percent.

With health care and other costs rising, these consumers spent less on furniture, entertainment, clothing and even child care, the Journal analysis found.
“Part of the story is that your income growth is slowing,” said Steven Fazzari, an economist and chairman of the sociology department at Washington University in St. Louis. “They’re spending more on necessities, cutting back on other types.”


Textwww.zerohedge.com...

This might have something to do with the "who the hell needs another flat screen tv" concept. Everybody has all the electronic they need so it's all down to buying an upgrade or not buying one.
To be honest I think that iTunes gift cards and other types of gift cards will be huge sellers this year because nobody knows what to buy anymore.

The only reason they are fighting in the stores over discounted items is so that they can flog them for a profit on Ebay.

Ok Stormcell, That's A Good Idea as how to make some extra cash, So, this is why Sales are way down? OK, we'll take this as an answer. Thanks for your reply and A Star for you > a reply to: stormcell

The geniuses who run things are bankrupting America to put the people more on par with the third world.........
Its that freaking simple.....

So, we're talking Gadget Exhaustion here? That's quite plausible. A Good Reply and A Star for you Hossierdaddy71 Arjunanda a reply to: Hoosierdaddy71

Yep, You're Right On That Stirling and A Star For You. Thank You for your reply Arjunansa a reply to: stirling

I totally agree with this can we name one commodity or necessity that is inexpensive or has gone down in price.

(people have long thought that this is a conspiracy by the controllers to keep us working so hard to maintain so that we can't make a difference.)

originally posted by: arjunanda
Well Surprise Surprise Surprise Boys and Girls, The Gang of Einstein's over at The Wall Street Journal are finally coddling on to the fact that there's just not as many Discretionary Transactions flowing through the economy. So, they have wondered why this is happening.

It's because everything we need to survive is so Darned Expensive! Rents/Mortgages, Medical Care, Food etc. has gone through the roof!!!

Sp, they have been hoping to prime The Spending Pump with their Great Black Friday.Cyber Monday Deals/ Well, I've got Mad News for The Retailing Corporations (Monetary Extraction Devices). People are Tapped Out! Yeah, we'll bit at The Little Bit of Chum they throw in the waters to hopefully restart a consumer feeding frenzy and once those items are gone, then so are we. Adios A-Holes .

From what this article says, even The Top Ten Percent which had been supporting Consumer Discretionary Spending is now shrinking down to Five Percent, Oops!

So Waddya Think ATS, Is this article On The Money (Remember That Stuff, LOL) Or, have they got this ALL WRONG?

Lettuce Know what you think, All Comers, Answers and Complaints will be dealt with in The Usual Way (with A Friendly Respectful Answer).

Mods, I've put this in The Global Meltdown Section, you Guys and Gals Know The Drill if this needs Moving/

Thanks Everyone for taking a look at this and especially Our ATS Compadres with Replies. Peace Y'ALL

Arjunada.


With Black Friday sales plunging and Cyber Monday growth slowing, it appears the chicken of stagnant wages and debt-saturation are coming home to roost for a massacred middle-class America. However, as WSJ reports "we are buying less stuff," because the basic costs of necessities such as healthcare, food eaten at home, rent, education, and cellphones have surged.

As The Wall Street Journal reports,

Consumer spending continues to make up just over two-thirds of the U.S. economy. But where households spend that money has shifted significantly.

To see how it has moved, the Journal analyzed Labor Department data on 2013 out-of-pocket spending for the middle 60% of the population by income—households earning between about $18,000 and $95,000 a year, before taxes.

The data show they are losing ground. Overall spending for the group rose by about 2.3% over the six-year period from 2007, even as inflation totaled about 12%. At the same time, income for the group stagnated, rising less than half a percent.

With health care and other costs rising, these consumers spent less on furniture, entertainment, clothing and even child care, the Journal analysis found.
“Part of the story is that your income growth is slowing,” said Steven Fazzari, an economist and chairman of the sociology department at Washington University in St. Louis. “They’re spending more on necessities, cutting back on other types.”


Textwww.zerohedge.com...

To start off....this and will always be the end result of the retarded economic model known as infinite growth......this is a finite market where infinite growth is absurdly impossible.

So companies saturate the markets until there are no new customers. Atwhich point they notice profits arent growing any more.

So the geniuses cut their workers pay to increase profits.....and around it goes until present.


I have written extensively about this many times.


Suffice to say. billion dollar corps dont pay decent wages no dispossable income..no dispossable income no billion dollar corps....they are too greedy to see that them damming up all the wealth has killed their fields.


We deserve extinction if the idiots doing this are our best and brightest.


ETA BTW I called this explained and offered the only free market fix over a year ago.

It entails corps over certain size to pay out at least half their net profits to their hourly workers..you know the folks doing all the actual profit generating work.

All manageament and executive pay comes out of the corps half.

This a 2 fold effect.

Now the workers gain as the company gains raising productivety while keeping retarded executive bonuses in check
On the front side now workers once again have dispossable income..companies win secondhand workers win up front...instant labor economic growth.

This is a little off, but I am a Realtor. Of course in Florida, which has strong markets even when the rest of the country doesn't. I am always amazed at the sheer number of people buying $200,000 homes and up. I work for builders selling New homes only. We have a small builder that is building about 200 a year themselves and many builders here doing the same or the Nationals building much more.

And when you look at the overall market literally tens of thousands of homes are being built every year. It is not too hard to get a mortgage as long as your debt to income ratio and loan to value ratios are in line and you have 2 years employment in a job. We have people qualify even with credit scores of 580 still. And the banks are under pressure again to ease their requirements. Now the 580 scores are limited to certain banks and different banks calculate the scores using their own proprietary formula and not the credit bureaus numbers.

So, there are a good percentage of middle class people with spending power and money. I think people are just tired of the overkill of marketers trying to sell all types of material crap. Sure, people want a comfortable home with a media room equipped with a nice entertainment system and the usual electronics found around the home and used in business also. Beyond that, how much crap does someone need?

I am a Realtor now as I said above, but I also build computers and networks (BS in Information Technology and a Certified Electronic Tech) and a mechanic who does everything from building motors to anything else except transmissions. So, I do have a lot of stuff in both my electronic lab/shop, my garage full of mechanics tools, etc. But, I am probably an exception to the general rule. Most people just don't need all that expensive stuff related to the other fields they are not primarily working in. The diversity helps me make money regardless of one of them slowing down at different times. And I also get business because I charge about half what it would cost you in a formal retail shop. My buildings are on my property.

So, I think there is a mindset that is starting to become more prevalent in society in general. People are tired of the Wall Street, Big Corporations, etc. basically sapping them of cash that would be better used to secure the important things in life, like shelter, food, and the necessary items for living in the modern world. People are watching their money much closer as the memory is still very fresh on the financial collapse we went through and are still very possibly going to see fall into a worse state from government and central back intervention in the system to prop it up.

I think many people, due to the massive ability to gather information and reach consensus socially on the internet, are tired of the Corporate influence in politics, government being corrupted and paid for by said corporations and their shady operations. These feelings also have SOME effect on people not wanting to support them as much as possible. I think many people are trying to get away from the MATERIAL obsession we all know has come with the propaganda of being a good citizen and consumerism. We have even seen the POTUS come out after disasters saying, "Go out and shop and make purchases and support the economy" (paraphrase). Look, the economy individually is what you need for your family and self. I have a lot of things, but not stuff I would never use just because it was on sale or the popular item at the time. For me, tools (electronic & mechanical), computational capability of whatever flavor is required, food, transportation, shelter, and the ubiquitous insurance so you don't lose your health or higher dollar possessions to the many causes of loss.

People, if they are smart about the current world situation and even the US situation, should or IMHO so, be spending on the necessary items and not stacking material item after material item in their lives that really are not needed. And with the uncertain outlook on the economy, this becomes even more important. So, these big corporations, chain stores, etc. that sell so much junk will probably be seeing less and less overall discretionary spending. At least that is what I think is happening. I also think it is catching on and will become more so as the idea or knowledge is disseminated on the internet and in social circles. And we here at ATS know that people are also not wanting to support as much as possible the nightmare of fascism - corporations and government in bed together ruining the live and finances of so many people by their laws and policies.

How do you fight back against such an animal and the elites? Not support their financial base as much as one can curtail it. Buy locally, by what you need and not a lot of 'Stuff''. I think with the debt situation (at least here in America) people can see the writing on the wall and it is not fading, more is being written. That is just my 2 cents and a possible outlook on why things are going this way. Of course, my ideas change and evolve from time to time and someone may prove me wrong. Hack Away my friends!

Common sense is not about to really prevail anytime soon. Mass media marketing is a science now. For example, everybody now needs to make individual fresh coffees with those new machines, in all the flavors. Everybody wants to buy a drone 'something'. Kids are being sold on drone dinosaurs. As inflation gets worse, people also realize their money is losing purchasing power, so they want 'things' to show for it. And they know a good deal when they see it. Don't ignore the fact that online buying went up the last couple of weeks, even while mall sales went down. The great herds are still heading for the cliff's edge.

Good Reply beforemorning, Yeah, I too have noticed the online sales ticking up, but they are still a small percentage of total sales, so their relevance is a little overblown. As for those Dumb Coffee Machines that make all those flavored Coffees from those different colored little pellets, I really hate those things and the stupid commercials advertising them. Give me my Costco 100 percent Columbian every time, A Very Good Brew. Thanks for you reply and Peace Arjunanda. /a reply to: beforemorning