Henry F. Potter
2014-03-15 04:34:08 UTC
19 Signs The US Consumer Is Tapped Out
03/14/2014
You can't get blood out of a rock. Traditionally the United States has
had a consumer-driven economy, but now years of declining incomes and
rising debts are really starting to catch up with us. In order to have
an economy that is dependent on consumer spending, you need to have a
large middle class. Unfortunately, the U.S. middle class is steadily
shrinking, and unless that trend is reversed we are going to see massive
economic changes in this country.
For example, in poor neighborhoods all over America we are seeing bank
branches, car dealerships and retail stores close down at an alarming
rate. If you didn't know better, you might be tempted to think that
"Space Available" was the hottest new retailer in some areas of the
nation. On the other hand, if you live in San Francisco, New York City
or Washington D.C., things are pretty good for the moment. But as a
whole, the condition of the U.S. consumer continues to decline. Incomes
are going down, the cost of living is going up, and debts are
skyrocketing. The following are 19 signs that the U.S. consumer is
tapped out:
#1 Real disposable income per capita continues to fall. In the fourth
quarter of 2012, it was sitting at $37,265. By the time that the
fourth quarter of 2013 had come around, it had dropped to $36,941.
That means that average Americans have less money to go shopping
with than they did previously.
#2 In January, real disposable income in the U.S. experienced the
largest year over year decline that we have seen since 1974.
#3 As disposable income decreases, major retailers are closing thousands
of stores all over the country. Some are even calling this "a retail
apocalypse".
#4 From September 2013 to January 2014, the personal saving rate in the
United States dropped by a staggering 16 percent.
#5 During the fourth quarter of 2013, we witnessed the largest increase
in consumer debt in this country that we have seen since 2007.
#6 Fewer Americans are applying for mortgages these days. In fact, the
MBA Purchase Applications Index is now the lowest that it has been
since 1995.
#7 Overall, the rate of homeownership in the United States has fallen
for eight years in a row.
#8 Many Americans are finding it increasingly difficult to afford a new
car or truck. The following comes from a recent CNBC article...
A new study shows the average household in 24 of America's 25 largest
metropolitan areas cannot afford to pay for the average priced new
car or truck.
"Just because you can manage the monthly payment doesn't mean you
should let a $30,000 or $40,000 ride gobble up such a huge share
of your paycheck," said Mike Sante, managing editor of Interest.com.
"Many people are spending money on a car payment that they could
be saving."
#9 Incredibly, 56 percent of all Americans now have "subprime credit"
at this point.
#10 Total consumer credit has risen by a whopping 22 percent over the
past three years.
#11 In the third quarter of 2007, the student loan delinquency rate
was 7.6 percent. Today, it is up to 11.5 percent.
#12 Overall, U.S. consumers are $11,360,000,000,000 in debt.
#13 While Barack Obama has been in the White House, median household
income in the United States has fallen for five years in a row.
#14 U.S. workers are taking home the smallest share of the income pie
that has ever been recorded.
#15 One recent study found that about 60 percent of the jobs that have
been "created" since the end of the last recession pay $13.83 or
less an hour.
#16 Middle-wage jobs accounted for 60 percent of the jobs lost during
the last recession, but they have accounted for only 22 percent
of the jobs created since then.
#17 According to one recent survey, only 35 percent of all Americans
say that they are better off financially than they were a year ago.
#18 In 2008, 25 percent of all Americans in the 18 to 29-year-old age
bracket considered themselves to be "lower class". In 2014, an
astounding 49 percent of them do.
#19 The poverty rate in America has been at 15 percent or above for
3 consecutive years. That is the first time that has happened
since 1965.
Despite what the mainstream media keeps telling them, most Americans
know on a gut level that there is something fundamentally wrong with our
economy.
According to Gallup, "Unemployment/Jobs" is the number one issue that
Americans care about these days and the "Economy in general" is the
number three issue that Americans care about these days.
Most people just want to work hard, make a decent living and take care
of their families.
Sadly, that is becoming increasingly difficult to do.
And the numbers that I have shared above only tell part of the story.
For a more personal side to all of this, I encourage you to read my
previous article entitled "10 Stories From The Cold, Hard Streets Of
America That Will Break Your Heart" if you have not done so already.
The really bad news is that this is about as good as things are going to
get for the U.S. economy. The long-term trends that are eating away at
our economy like cancer are intensifying, and our "leaders" just
continue to act as if "business as usual" will somehow get the job done.
Most of them don't even realize that time is running out.
As I discussed yesterday, there is a lot of evidence that the massive
financial bubble that the Federal Reserve has inflated is getting ready
to burst.
When the next great financial crisis does strike, it is going to be
absolutely disastrous. We are in far worse financial shape than we were
back then, and this next round of financial trauma could truly be the
"knockout blow" for the U.S. economy.
Let us hope for the best, but let us also prepare for the worst.
http://www.zerohedge.com/news/2014-03-14/19-signs-us-consumer-tapped-out
03/14/2014
You can't get blood out of a rock. Traditionally the United States has
had a consumer-driven economy, but now years of declining incomes and
rising debts are really starting to catch up with us. In order to have
an economy that is dependent on consumer spending, you need to have a
large middle class. Unfortunately, the U.S. middle class is steadily
shrinking, and unless that trend is reversed we are going to see massive
economic changes in this country.
For example, in poor neighborhoods all over America we are seeing bank
branches, car dealerships and retail stores close down at an alarming
rate. If you didn't know better, you might be tempted to think that
"Space Available" was the hottest new retailer in some areas of the
nation. On the other hand, if you live in San Francisco, New York City
or Washington D.C., things are pretty good for the moment. But as a
whole, the condition of the U.S. consumer continues to decline. Incomes
are going down, the cost of living is going up, and debts are
skyrocketing. The following are 19 signs that the U.S. consumer is
tapped out:
#1 Real disposable income per capita continues to fall. In the fourth
quarter of 2012, it was sitting at $37,265. By the time that the
fourth quarter of 2013 had come around, it had dropped to $36,941.
That means that average Americans have less money to go shopping
with than they did previously.
#2 In January, real disposable income in the U.S. experienced the
largest year over year decline that we have seen since 1974.
#3 As disposable income decreases, major retailers are closing thousands
of stores all over the country. Some are even calling this "a retail
apocalypse".
#4 From September 2013 to January 2014, the personal saving rate in the
United States dropped by a staggering 16 percent.
#5 During the fourth quarter of 2013, we witnessed the largest increase
in consumer debt in this country that we have seen since 2007.
#6 Fewer Americans are applying for mortgages these days. In fact, the
MBA Purchase Applications Index is now the lowest that it has been
since 1995.
#7 Overall, the rate of homeownership in the United States has fallen
for eight years in a row.
#8 Many Americans are finding it increasingly difficult to afford a new
car or truck. The following comes from a recent CNBC article...
A new study shows the average household in 24 of America's 25 largest
metropolitan areas cannot afford to pay for the average priced new
car or truck.
"Just because you can manage the monthly payment doesn't mean you
should let a $30,000 or $40,000 ride gobble up such a huge share
of your paycheck," said Mike Sante, managing editor of Interest.com.
"Many people are spending money on a car payment that they could
be saving."
#9 Incredibly, 56 percent of all Americans now have "subprime credit"
at this point.
#10 Total consumer credit has risen by a whopping 22 percent over the
past three years.
#11 In the third quarter of 2007, the student loan delinquency rate
was 7.6 percent. Today, it is up to 11.5 percent.
#12 Overall, U.S. consumers are $11,360,000,000,000 in debt.
#13 While Barack Obama has been in the White House, median household
income in the United States has fallen for five years in a row.
#14 U.S. workers are taking home the smallest share of the income pie
that has ever been recorded.
#15 One recent study found that about 60 percent of the jobs that have
been "created" since the end of the last recession pay $13.83 or
less an hour.
#16 Middle-wage jobs accounted for 60 percent of the jobs lost during
the last recession, but they have accounted for only 22 percent
of the jobs created since then.
#17 According to one recent survey, only 35 percent of all Americans
say that they are better off financially than they were a year ago.
#18 In 2008, 25 percent of all Americans in the 18 to 29-year-old age
bracket considered themselves to be "lower class". In 2014, an
astounding 49 percent of them do.
#19 The poverty rate in America has been at 15 percent or above for
3 consecutive years. That is the first time that has happened
since 1965.
Despite what the mainstream media keeps telling them, most Americans
know on a gut level that there is something fundamentally wrong with our
economy.
According to Gallup, "Unemployment/Jobs" is the number one issue that
Americans care about these days and the "Economy in general" is the
number three issue that Americans care about these days.
Most people just want to work hard, make a decent living and take care
of their families.
Sadly, that is becoming increasingly difficult to do.
And the numbers that I have shared above only tell part of the story.
For a more personal side to all of this, I encourage you to read my
previous article entitled "10 Stories From The Cold, Hard Streets Of
America That Will Break Your Heart" if you have not done so already.
The really bad news is that this is about as good as things are going to
get for the U.S. economy. The long-term trends that are eating away at
our economy like cancer are intensifying, and our "leaders" just
continue to act as if "business as usual" will somehow get the job done.
Most of them don't even realize that time is running out.
As I discussed yesterday, there is a lot of evidence that the massive
financial bubble that the Federal Reserve has inflated is getting ready
to burst.
When the next great financial crisis does strike, it is going to be
absolutely disastrous. We are in far worse financial shape than we were
back then, and this next round of financial trauma could truly be the
"knockout blow" for the U.S. economy.
Let us hope for the best, but let us also prepare for the worst.
http://www.zerohedge.com/news/2014-03-14/19-signs-us-consumer-tapped-out