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The recession is only over if you ask the right people. While some sectors are starting to see the light at the end of the tunnel, consumers remain concerned. It may be tempting to listen to the experts over the average Joe, but the former don't control 70% of the U.S. economy. So, as long as people are worried abou unemployment (which continues to rise), the levels of debt they carry and whether they're at risk of foreclosure, the recession will live on in the hearts of those who write checks and swipe credit cards.
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FeedConsumer sentiment drops: savings and debt repayment are culprits
Continue reading Consumer sentiment drops: savings and debt repayment are culprits
Consumers: Income & savings up -- Gov't worried
We live in amazing times. Consumers are earning more; at least the ones with jobs. They are also saving more than they have in the last 15 years. The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent, the highest level since December 1993. I think that is fantastic!Ben Franklin said, "A penny saved is a penny earned". If that is true, then people are improving their economic condition day by day. Strange as it might seem, the government is troubled by this.
The government and many economists are worried that without greater spending by consumers any economic recovery will be stalled that much further. During our recent manic economy, over the past decade, consumer spending was responsible for about 70% of the GDP.
I say to all my readers, let others spend -- YOU KEEP SAVING -- and reducing debt. You will be glad you did. The consumer led economy was a false economy. The world is mourning the sudden death of Michael Jackson who passed away yesterday from yet to be determined causes leading to cardiac arrest, reportedly $400 million in debt. You think he was under any stress?!
Continue reading Consumers: Income & savings up -- Gov't worried
Savings rate hits 14-year high
Here's a silver lining to that dark cloud some folks are calling the worst economic environment since the Great Depression: the savings rate is up. Nervous about the other shoe dropping, Americans are stashing away extra funds for a rainy day. In large part, cash collected from bonus payments, cost-of-living raises, or holiday gifts were saved rather than spent in January, lifting the personal savings rate to its highest since March 1995, at 5.0%. Just last year, the personal savings rate was hovering at an unimpressive 0.1%. From the 1950s through the early 1980s, however, the savings rate was closer to 10%. Viewed on an annual basis, the personal savings rate hit a new record of $545.5 billion.
A bright side of the recession: Piggy bank sales are rising
Frustrated with poor returns from the stock market, investors are increasingly turning to a conventional strategy that can promise security at 0 percent interest rates. I am talking about piggy banks.According to Reuters, sales of the novelty banks are rising as the economy continues to worsen. Exact figures are hard to come by but several retailers report rising demand. Piggy Bank World.com reported a strong holiday season, according to Michael Gehi, one of the owners. Companies are also increasingly using the banks for promotions.
Though my wife and I don't own a piggy bank, we have taken our loose change to Commerce Bank (now owned by TD Bank (NYSE: TD), which for years has counted people's spare change for free in a nifty computerized machine.
Continue reading A bright side of the recession: Piggy bank sales are rising
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