Wealthy Are the Only Ones Spending

Retail sales tumbled 1.2% in May, as a new poll indicates that the spending is primarily coming from wealthier and older consumers.

The government released its report on retail sales for May on Friday, and the Commerce Department said sales dropped from the previous month bucking expectations for a small increase. Declines were pretty broad based among autos, gas stations and general merchandise stores. Grocery and health-care stores posted increases, and there was some strength in companies that sell furniture and appliances, possibly boosted by government tax credits.

A new poll from Gallup may indicate that the mix of spending may have a hard time keeping retail sales buoyant. The poll indicates that consumers who make more than $90,000 account for the bulk of that spending increase. Upper-income Americans’ self-reported spending rose 33% to an average of $145 per day in May — up from $109 per day in April. Meanwhile, middle- and lower-income Americans’ self-reported spending averaged $59 per day in May, unchanged from the previous month.

Higher-income “consumers seemed to be holding back on spending prior to May in response to the length and depth of the recession, the financial crisis, and a general feeling of economic uncertainty,” wrote Dennis Jacobe, Gallup chief economist. “In May, this seemed to change. It could be that many upper-income consumers are experiencing ‘frugality fatigue.’”

http://blogs.wsj.com/economics/2010/06/10/wealthy-are-the-only-ones-spending/

Million dollar bonuses burning a hole in their pockets.

Okay, it's not quite a million, but it does have a zero in it.

Which means starting at $90,000 and going up all the way to the top.

So that includes all the execs and their million dollar bonuses.

The most affluent amount to 11.2 million households in the U.S. which accounts for almost 40% of total personal income and two-thirds of the personal wealth of all Americans.

http://www.affluenceresearch.org/research.html


The rich make a huge difference in consumer spending totals.

And thus more sucking up to the plutocrats

I've been working at the same company for 17 years and received regular promotions. Last year with 6k bonuses I pulled in 57k. I'm doing well but don't consider myself wealthy.

I get the impression that many people whose personal finances haven't been much impacted by this recession are neverthelss cutting back on their spending. If so, it's not helping the economy. However, my situation may be a bit different from others in my income bracket. My wife pulls in about 25k and we finished putting her daughter through college and have paid off our home & auto loans. We pay the credit card bills in full every month. I understand that most fully-employed people have some real debt to deal with.

but I don't think the public is getting anything worth spending on. We have basic Comcast cable but it doesn't work worth beans most of the time. On demand is lousy and only sometimes works, we had someone out to look at it and he was obviously unqualified. Did not know how anything worked, another guy worked on the box outside and my husband chatted with him and he said he was 'fixing' a problem. We haven't noticed a difference, and then we get a call from comcast wanting us to buy more and bundle everything through them. Told them NO!. Everything went digital so they could sell us more stuff and it is lousy and OLD, and I can see why they NEED a monopoly! Bet in european countries they don't have this mess. My hobby is sewing and all we can buy is lousy fabric, made in China, and not much of a choice. Joann's bought out the competitor that was in this town for 20 years and took over and then became really lousy. Before they bought out the competitor you could buy linen and wool and now it is mostly poly and cotton, and not much cotton, unless you are a quilter. I could go on and on. sorry for the rant.