September 9 2010
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Recession has rich and poor cutting back!

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While the economy nevertheless needs stimulating quite a bit, those well off are doing many of the spending to help. But now the New York Times reports that even the big spenders have roped in their purchases. The American economy has come deadly close to halting as noted by the Federal Reserve. If the economy gets worse than it is now, a stimulus package could be required to keep things going.

Source for this article - Recession cutback city - Even the rich people are doing it by Personal Money Store




Wealthy spend, jobs created



Demand for goods and services create the need for additional jobs, and spending – particularly that of the top 5 percent of U.S. income earners – indicates demand. Moody's explained that those earning $ 210,000 are in the top five percent and are "one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts.". As 60 percent of America's economic fortunes depend upon consumer spending, that one-third is of super-sized significance. Gallup found that those earning $ 90,000 or more – their "upper income" classification – spent $ 145 per day in May 2010.



That was up 33 percent more than May 2009. The numbers dropped in June 2010 the Times discovered. Rich individuals decided to drop the number to $ 119 per day. Were they leaning upon bank loans more than was their custom?



Companies just for Luxury doing very badly



In early 2010, luxury business were doing very well for themselves. When summer started, hotels that normally would have more business, the Ritz Carlton and Four Seasons, were dropping in sales. Retailers such as the Neiman Marcus and Saks Fifth Avenue had sales go down around the very same time. To add to this stop in spending on luxury, real estate in Manhattan and the Hamptons has dropped significantly. Sure, those who aren't rich are forced to be more frugal and use the occasional fast loan, but if rich people stop spending, it's panic time.



Going where you have to for the Dow



When it comes to deciding how the economy is doing, wealthy people consider different things than the average person. The Dow Jones is going to mean a lot to those who are invested than any person else. Since the numbers were within the 7,000s for such a long time, we can see the affect taking place when they hit 10,000 again. Spending went up in every little thing, even car sales. Luxury vehicle dealers did well, but of late, some luxury auto dealers have enacted layoffs of 15 percent of more of sales staff. While individuals are trying to just keep themselves fed and with a roof over their head, it looks fairly bad for the wealthy to keep spending, as outlined by a study done at the Institute for Policy in Washington.



Signs of an economic apocalypse?



"Apocalypse" could be a word that seems to dark for what happened, but think about it. A skin care product saleswoman named Linda Stasiak explained the $ 15.95 tube wringer has top sales. It's intended to squeeze each and each and every drop out of a tube – because today, even rich individuals are feeling the squeeze. Does everyone need a fast loan for their tube squeezers?



Sources for the article:



New York Times

nytimes.com/2010/07/17/business/economy/17consumers.html?_r=1

Has the recession changed our perception of wealth?

youtube.com/watch?v=aCsIoHMxazs

 

 

submitted by Jake on July 27th 2010

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