Middle Class Holding Cash?

[Fivetears]

Waiting for the holiday, are we?

NEW YORK (Reuters) - Harsh winter weather chilled U.S. retail sales in February, and industry leaders said March results would be hurt by a later Easter holiday. Wal-Mart, the world's largest retailer, and rival Target were among those warning that sales could be weak this month as consumers delay their spring buying, waiting for the holiday. Easter, which fell in March last year, is on April 16 this year. "The Easter effect is a reality," said Pacific Growth Equities' Chen. "If you go on vacation later, you postpone your shopping."

I tell ya, if the financial naysayer’s can't blame Americans for not showering retailers with cash on the weather... they'll blame it on all the wrong reasons for celebrating Easter.

 

[Fivetears]

Middle Class Incomes Dropped 2.3% 2001-2004

23 February 2006, Associated Press
WASHINGTON — The average (or otherwise refered to as Middle Class) income of American families, after adjusting for inflation, declined 2.3% in 2004 compared with 2001 while their net worth rose but at a slower pace.

The Fed survey found the share of Americans' financial assets invested in stocks fell to 17.6% in 2004, from 21.7% in 2001.

The percentage of Americans who owned stocks, either directly or through a mutual fund, fell 3.3 percentage points to 48.6% in 2004, down from 51.9% in 2001.

Stock ownership rates were highest in 2004 among families with higher incomes and families age 55 to 64.

With the first baby boomers turning 60 this year and nearing retirement, the survey found the percentage of families with some type of tax-deferred retirement account, such as a 401k, fell 2.5 percentage points to 49.7% of all families. Those who had retirement accounts saw their holdings increase.

The Fed survey found that debt as a percent of total assets rose to 15% in 2004, from 12.1% in 2001. Mortgages to finance home purchases were by far the biggest share of total debt at 75.2% in 2004, unchanged from 2001.

Feeling a pinch yet? Keep in mind, this information does come from Washington, and it's likely watered down a bit to dilute larger numbers, and appease the rich, who are in denial of all this.

 

[Fivetears]

Don't drop your wallet.

U.S. consumer prices surged 0.7 percent last month. Retailers are passing higher prices to consumers to boost profit margins. Over the past year, consumer prices have climbed 4.0 percent, the largest 12-month increase since October 2005 and an acceleration from December's 3.4 percent increase. The rise in consumer prices since January 2005 is well above the 3.6 percent increase in average weekly earnings in the same period. Consumer budgets are not keeping pace with rising prices.

The rise in overall consumer prices in January was driven by a 5.0 percent increase in energy costs. Gasoline prices rose 6.4 percent, electricity prices advanced a record 5.5 percent and natural gas prices were up 1.7 percent last month. That was only slightly offset by a 1.9 percent decline in the cost of fuel oil. These higher energy prices are being passed on to consumers as well.

Holding on to your cash yet? Big Business is trying real hard to get it from us; one way or another.

 

[Fivetears]

This is Not News.

17 February 2006 WASHINGTON (Reuters) — Rising prices for electricity, food and autos pushed wholesale prices up 0.3% in January while prices other than food and energy climbed 0.4% — twice market expectations and the fastest wholesale inflation in a year, a government report showed today.
This is no news to folks like us. The middle class has been getting gouged; for nearly a year. These figures actually seem very low. My Health & Auto insurance, gasoline and food bills went up a hell of a lot more than the above stated percentages. John Whitecollar & Jimbo Numbercruncher need to back away their SIMS games. These are living & breathing families they are dealing with.

 

[Birchtree]

EWGuy.

When you are magnanimous you have to look for the Karma. When you are a grandfather you won't have far to travel. Because you are going to do well in your TSP account, you'll be able to peel off profits for many to come special occassions.

The global village will provide potential to everyone - the kids could each make $60,000 working fast food in the Katrina war zone. It's all in the sacrifice.

And don't be overly concerned about the less fortunate, with food stamps they do get the steaks, price is no deterrent.

And besides, the military branches are paying a fair wage - pluse shelter, it's all in the sacrifice.

 

[cowboy]

Heres a quick theory. The US government has no brains and follows the conservationist and economist lead a very stupid idea. When it should be listening to it's people instead of the special interest people. The land is not changing to our younger people because Grandma is the owner and will be until CRP is no longer. Simple way to hold land and retire and still own reason you have 70% women ownership. The land is rented by larger farms as they can cover more ground with the no-till equipment and lower costs per acre. Livestock can only be raised efficiently in the areas where no-till is too costly and the weather unpredictable. The rest will be farmed eventually or put into conservation to save it. The result is higher cost to the tax payer and no jobs.

 

[The_Technician]

I was

telling the inlaws when they couldn't understand how me and my wife couldn't afford to send our children to college that its not the same as it was even 10 years ago....

They just don't know the bills that have inflated beyond belief for middle age and younger to pay for the expenses....

But I knew this was going to happen since the early 90's and had been telling my wife so, only thing was, I didn't have the investment knowhow or monies to do something about it.....

This is a backbone breaker......and it doesn't look like it will completely stop for a few years yet.....wait until you see people going broke soon, then that is first stage.....soft depression could be coming our way if expenses don't change for the citizen.....as it stands it coming down on us like a freight train going full steam.....

 

[EW_ret]

Food and Energy Will Become Luxuries

Maybe I am living in the past, but when two small ribeye steaks are on special for $4.98 a pound, I say basic food such as beef is too expensive for the less fortunate. Just a few years ago meat, poultry and fish was much less. I remember a time when I thought $5.00 a pound for beef was an outrageous price for people in Japan to pay. Now 5.00 a pound are special sales price.

What does it cost for food a week for a family of four or five? I have a son who does not have enough paycheck to pay the bills, buy food, and pay for shelter. Both he and his wife work, but they do not have sufficient funds to buy, or rent, their own place. Their credit rating is below registering on the scales. They now live in my home, and I spend a lot of time in the home of a friend. I could not forgive myself if my grandchildren had to live in the streets, or shelters.

That’s the life of a newly retired federal employee. I fell disgusted, and ashamed that our country does not provide enough jobs with sufficient pay to support its population. Inflation has been running in excess of 5%, includes the luxuries of food and energy, for some time now. It’s just that many believe the government manipulated inflation figures, rather than their own pocket.

 

[Mike]

I'm spending less on discretionary items this year, but that's due to the fact that I've already bought most of the things I needed within the past few months.

My plan for 2006 is to save and invest as much as I can and put my extra money to work for me as long as possible.

As for the term "inflation", it is misleading. Prices fluctuate across the board. I'll give a few examples:

Energy prices have soared since bottoming out in the late '90s. Healthcare and tuition costs have also climbed considerably.

However, at the other end of it, technology-related goods have declined in price. The $2000 computer of today is many times better than the $2000 computer from a couple years ago. The same can be said of tv's... and these things are being purchased with money that is worth approximately 6% less than it was in 2004.

So please - when discussing inflation, don't assume it means the cost of everything is climbing because it really isn't.

 

[Fivetears]

It's There...

There doesn't seem to be any wage inflation happening - where demand tends to pull up prices. Where is all this inflation the Fed is so concerned about? Those fools may actually have to drop rates in the second half.

Birch, I tell you... it's there. As I described a couple posts above... it's there. It costs more this year, to do and maintain the same lifestyle we did this time last year. We are being nickeled, dimed and dollared in so many different places. My wallet stays in my pocket more often than it did last year. My wife’s purse stays closed more often than it did last year. We talk to each other before we buy more often than last year.

Birch, I too have two daughters living at home; An 18yo 103 gpa Senior in HS, and a 20yo Sophomore Actuarial Science Major in college. They too hold jobs.

Call it what you want; tell me I'm F.O.S. The fact is... we (my family) don't spend as freely as we did last year. We are Holding Cash.

From what I'm reading above, other proud blue collar workers may in fact be experiencing the same.

 

[Birchtree]

What inflation?

There doesn't seem to be any wage inflation happening - where demand tends to pull up prices. Where is all this inflation the Fed is so concerned about? Those fools may actually have to drop rates in the second half.

 

[pogo]

i feel the same way try to save but it getting harder to do--with 2 kids

 

[charmedboi82]

I, being a humble member of the middle class, have noticed I've been more inclined lately not to buy oddities & extras I pass in stores. I have marked personal increases in grocery costs, fuel, utilities, medical insurance, auto insurance, and clothing. My Civil Service pay raise has been wiped out, and the cost of living is digging deeper into my wallet. I am now in a position to be holding cash for necessities and reduced family travel needs. My wife and I (both in our early 40's) have no credit debt other than a house payment, and one car payment. We collectively filed an $80,000 tax return this year. Yes, we save a great deal to fund our vacation needs; which too have been cut down. I'm very electronically programmed into my financial situation, and the bottom line is we have less money this year to spend on stuff like balloons, candy, bubble baths, dining out, and generally nice stuff we pass in the stores.

By all this I mean us (my wife & I) "hard working members of the middle class" are HOLDING CASH for the most important things we enjoy, and have cut back in other areas.

Is anyone else in the middle class experiencing this?

Has anyone else seen evidence of this; personally experienced this?

Yes, the increase that we received was obviously an increase but in no way kept up with what we spend for various items 'necessary' to our lives (insurance, fuel, utilities, food, etc.) Money does go less far. I've always been a saver, but it's clearly getting harder and harder to be as good of a saver.

 

[yakers]

Only A Few Of Us

By all this I mean us (my wife & I) "hard working members of the middle class" are HOLDING CASH for the most important things we enjoy, and have cut back in other areas.

Is anyone else in the middle class experiencing this?

Has anyone else seen evidence of this; personally experienced this?

I think that increased savings and specificly increases in cash depend on our age and place in the employment cycle. Young folks starting out anre commonly not saving at all. Its nice that I can save. Now folks way up the finance chain like Warren Buffett are holding large amounts of cash as other assets don't look so attractive and if there is a steep decline in all or some part of the market then assets will become more attractive.
So although my savings and some of my similarly aged friends (55 year old) are saving more from the statistics I read this is not a common occurance.

 

[Fivetears]

Doing less... with less?

I, being a humble member of the middle class, have noticed I've been more inclined lately not to buy oddities & extras I pass in stores. I have marked personal increases in grocery costs, fuel, utilities, medical insurance, auto insurance, and clothing. My Civil Service pay raise has been wiped out, and the cost of living is digging deeper into my wallet. I am now in a position to be holding cash for necessities and reduced family travel needs. My wife and I (both in our early 40's) have no credit debt other than a house payment, and one car payment. We collectively filed an $80,000 tax return this year. Yes, we save a great deal to fund our vacation needs; which too have been cut down. I'm very electronically programmed into my financial situation, and the bottom line is we have less money this year to spend on stuff like balloons, candy, bubble baths, dining out, and generally nice stuff we pass in the stores.

By all this I mean us (my wife & I) "hard working members of the middle class" are HOLDING CASH for the most important things we enjoy, and have cut back in other areas.

Is anyone else in the middle class experiencing this?

Has anyone else seen evidence of this; personally experienced this?

 

[cowboy]

I think Charmboi82 put his finger right on the cause. The fact is the store is internal therefor possibly the customer is out of the same pool and there is not a large variance of new customers. The balloons that were sold last year had few repeat buyers the next year and the word of mouth reached the others who missed the opportunity last year. This caused lower sales which intern had nothing to do with inflation. The customer base was too small to handle the same volume of Balloons. So therefor the store may need to store some balloons for a couple of years.

 

[mlk_man]

But balloons make people happy. There's growing evidence that a positive attitude, state of being is more effective for good health than probably any supplement, etc.

Especially if you inhale them!

 

[charmedboi82]

Think beyond the obvious folks............this past year we've heard that dark chocolate and moderate consumption of alcohol is good for you. Perhaps that balloon money was spent on dark chocolate covered strawberries and a bottle of champagne.........there I do again, giving away my secrets..........

I'm thinking bubble baths are good for the skin also............

Anyone know of a good candle making company on the market?

Happy returns,

M_M

But balloons make people happy. There's growing evidence that a positive attitude, state of being is more effective for good health than probably any supplement, etc.

 

[mlk_man]

Think beyond the obvious folks............this past year we've heard that dark chocolate and moderate consumption of alcohol is good for you. Perhaps that balloon money was spent on dark chocolate covered strawberries and a bottle of champagne.........there I go again, giving away my secrets..........

I'm thinking bubble baths are good for the skin also............

Anyone know of a good candle making company on the market?

Happy returns,

M_M

 

[Fivetears]

Is it that you only have one year of anecdotal evidence? If so, it's very possible that people didn't want to buy the same thing that they did last year. Personally, I can't imagine buying any commerical item for Valentine's Day, let alone the same each year. Maybe it was just a fad for that year.

Perhaps you're right.