Feeling a money pinch? 'Wealth effect' begins to reverse (OH Paper)

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060826/BIZ01/608260341

Fresh evidence shows that high energy prices and sagging home values are pinching the main driver of the U.S. economy: the Average Joe's wallet.

Retailers and economists say many Americans are waiting to buy big-ticket items and cutting back on frills. Homeowners are shelving plans to remodel kitchens. Families are dining out less and tightening their budgets.

"People are taking funds from one area and committing them to another, gasoline and utilities in particular," Gregory Miller, chief economist at Sun Trust Bank Inc., said.

Miller predicts that growth in consumer spending will fall from a rate of 2.5 percent to around 1.5 percent during the second half of this year, bringing down overall economic growth at the same rate.

At the same time, homeowners are seeing a key source of their wealth lose value as housing prices fall in some parts of the country.

That's some fine journalism. I could written that story a year ago. It's seems prices are shooting up faster than in the 70's.

This is my life...Energy prices have caused EVERYTHING to cost more. ...Plus you consider the fact that a few years ago interest rates went down. A lot of people refinanced and took out home equity loans. Everyone's in debt and everyone's feeling the pinch. :(