Consumer Spending Falls For Record 6 Months Straight

Consumer spending has fallen for a record 6 straight months in December, the worst since 1961. By all accounts, it’s slated to keep falling for more to come. Incomes fell for three straight months, the worst since 1954. On the plus side, consumer savings increased to 3.6% of their paychecks. Spending less and saving more, sounds like the frugality mantra is catching on. It means fewer jobs for dog-walkers in the short term but a healthier base for future growth down the road. [Bloomberg] (Photo: nsub1)

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  1. Davan says:

    Obama our savior, deliver us!

    • GoVegan says:

      @Davan: I am afraid it will take a savior to get us out of this mess Bush got us into.

      • nighttrain2007 says:

        @GoVegan: Oh yes by spending more. I’m sure that’ll work…contrary to every talking head the best thing for the economy is that consumers (and the blessed government) begin to spend less

        • Bladefist says:

          @nighttrain2007: Are you saying that STD Education won’t heal the economy? How dare you.

          • nighttrain2007 says:

            @Bladefist: I know. I’m a bad person ;) I would also say the massive amounts of ‘stimulus’ in line with the broken window theory won’t help either…that’s the good and bad of it though isn’t it? On one hand, the average public doesn’t listen to the talking heads, saves instead, and the economy turns around. On the other hand, the blathering idiots who pass these massive expenditures take credit for the recovery

          • Trai_Dep says:

            @Bladefist: Err, yes, it’ll help.

            “Under current law, states wanting to use Medicaid money for family planning services, including cancer screenings, must obtain a waiver from Washington, as some 27 states have done. The modest provision that was cut would have done away with the cumbersome process. The Congressional Budget Office has estimated that the measure would provide coverage to 2.3 million women by 2014 and save $200 million over five years.

            The Medicaid family planning provision would reduce the number of abortions by helping an estimated half-million women avoid unplanned pregnancy, according to a study by the Guttmacher Institute. The knee-jerk opposition of House Republicans was but the latest sign of G.O.P. insensitivity to women’s rights and health. President Obama should no longer placate it.”

            -NYT

            So, the majority of states already do it, this simply reduces the bureaucracy (read: gov’t waste) involved. And the amounts saved are in the hundreds of millions of dollars range, setting aside the savings involved in catching diseases when they’re treatable with a cheap pill rather than later, let alone reducing human misery.

            Of course, saving money, reducing misery and fixing real problems haven’t exactly been a high GOP priority so few are surprised at their hostility at a simple, common-sense fix of a program that the majority of states already do anyway.

            • Bladefist says:

              @Trai_Dep: This is a different debate for a different debate. I have my issues with that. Trust me.

              But lets assume for a second we agree on what you just said. Saving money is great. But this is a stimulus bill. Saving money != Stimulus. Catch my drift?

              • Trai_Dep says:

                @Bladefist: Hey, you raised the Limbaugh talking points. If you don’t like it, improve the source of your news.
                So, you’re for gov’t bureaucracy, useless gestures, wasting hundreds of millions of our dollars and causing untold personal pain, all for an “issue” that most states already do anyway? Putting all those hundreds of dollars into more productive use would be stimulating.
                Ditto your shrugging off the $3 trillion wasted in Iraq and forcing de facto nationalization of our financial system (and its trillions). You can’t talk about today’s spending to fix yesterday’s screw-ups without knowing where we went wrong. Particularly when those who cheered as the tragic course was set feign to cure things now.
                The flap over the family planning provision for Medicare is the perfect encapsulation of Republican efforts to address the fiscal apocalypse they’ve unleashed: ineffectual, mis-informed, wasteful and catering largely to their religious fundamentalist base. Addressing real problems that most Americans are mired in? Not so much.
                With you guys running things for the past eight years, I’m beginning to see why it’s going to take longer than two weeks for President Hopey to clean up your messes. You can’t lead. You won’t follow. Get out of the way? Please?

                • Bladefist says:

                  @Trai_Dep: Dang it – I thought we might actually have our first on topic debate. You are unable to do that because you know that it’s not a stimulus, but it’s in the stimulus package. Admit it. Don’t try to bring up other stuff to debate about.

                  Oh well, I tried.

                  • Trai_Dep says:

                    @Bladefist: So, after 230 years of the US Congress passing laws that include some provisions that don’t meet strict criteria based on the bill’s title, now you’re saying that only for this bill, this absurd, ahistorical, out-of-left-field standard be applied?
                    …INteresting.
                    I – and most Americans – value restoring the nation and its people over such tomfoolery. Good luck with your approach.

                • Bladefist says:

                  @Trai_Dep: The Limbaugh talking points are the conservative talking points.

                  If you think associating me to Limbaugh makes me look bad, trust me it doesn’t. Just as I associate you to the NYT or Keith Olbermann. Why do you have opposition? You do realize if _any_ _one_ party took over, we all lose, right?

      • Bladefist says:

        @GoVegan: So far I don’t see much difference between Bush and Obama on economic policy. Could you please explain the differences?

        • Nyses says:

          @Bladefist:

          Not much difference? hhmm, well Bush did spend record amounts in him tenure. The difference is that Bush funded a multi hundreds of billions of dollras war that pumped billions upon billions into Iraq, yes and money went to pay our solders and defence contractors.

          Obama does propose massive spending to pull us out of recession, but he wants to actually spend the money her in the US, on US jobs, to pay US workers. Said US workers can then use thier paycheck to buy groceries, and lattes, and clothes and televisions, further stimulation the economy.

          • Bladefist says:

            @Nyses: You sound like the media. Just an Obama cheerleader. The IRAQ war in terms of costing is nothing compared to these bailouts. Consumerist put up a chart to prove that a while back.

            Iraq (a whole another debate) is intended to defend America (again another debate), which is the national governments primary responsibility, whereas bailing out the private sector is not (another debate).

            Well I’m done. Your argument is weak and I feel what I’ve said is enough.

            Bush and Obama are both fiscal liberals, and their differences are minor.

  2. Ash78 ain't got time to bleed says:

    3.6% is a good start. Too bad we’re garnishing 50% of our grandchildren’s wages.

  3. Maulleigh says:

    I wish it would last, but it won’t.

  4. Fineous K. Douchenstein says:

    I’ve heard just about all I can stand of this spending our children’s money crap. Everyone talks of how much of it we’re spending, but nobody mentions how much of that is going to be paid back as surplus when the economy begins its next up-turn.

    It’s only our children/grandchildren’s problem if we’re irresponsible enough to leave it there for them decades down the road. Shut up about it TODAY.

    • thnkwhatyouthnk says:

      @wagenejm: I take it you’re responding to Ash? They have this wonderful button under everyone’s comments, it looks like a half-circle with an arrow on the end. You know what that does? It replies to a comment, and then you don’t look like a noob.

      You wanna know about something else that prevents you from looking like a noob? A Dictionary. Using one, you could find the definition of “garnishing”. Hint: it doesn’t mean “spending”.

    • cmdrsass says:

      @wagenejm: so naive. As far as the government is concerned, there is never any surplus. Any time revenues are expected to increase, spending increases to meet or and usually exceed it.

    • Fineous K. Douchenstein says:

      @thnkwhatyouthnk: It’s not a direct response to Ash, so before you look like a condescending jerk you might not want to assume you know what someone else is intending. Overall, I’m sick of hearing repeated complaints that we’re putting our children and grandchildren in debt. My next point leads into my other responder.

      @cmdrsass: You’re right and wrong at the same time. No, there aren’t surplusses in a literal sense, but they exist. In government, surplus is predicted and budgeted to be paid toward previous debts.

    • Tmoney02 says:

      @wagenejm: except government surpluses are almost never true surpluses. Usually, as in the Clinton years, their was more money coming in then government expenditures/programs, but such things such as the interest on the national debt aren’t included. So overall the government still isn’t actually in the black.

      Also whenever a surpluss is projected it almost never appears becuase either
      A) someone was way too optimistic (and they have a multiple reasons to be biased) or

      B) politicians say -We have a surplus we can afford to increase funding to …the military, welfare, other pet project and spend it before it even reaches the coffers or actually pays down the debt.

  5. bohemian says:

    If the recent spending (before the decrease) was artificially inflated by people buying tons of crap they didn’t really need, then we are just going back down to a normal level of spending.

  6. Skankingmike says:

    It means more than just dog walkers.

    Our whole society and economy is based on frivolous shopping and spending.

    Buying something the Jones’ have, or better. Going out to diner and lunch and breakfast.

    There needs to be that sort of reckless behavior again or we’ll never get out of this.

    • thebluepill says:

      @Skankingmike:

      Thought you might sound like your kidding.. that really is what is needed to pull out of this mess right now..

      Problem is.. It just isnt sustainable..

      Wonder what the medium point is?

      • TVarmy says:

        @thebluepill: Hard to tell. Can we really supply the necessary amount of jobs without needing to encourage people to spend like crazy and ignore the environmental and geopolitical implications of what they’re doing?

        It doesn’t seem like there are any easy answers or solutions here. I’m worried we either can have massive unemployment and a sustainable relationship with the Earth and its resources, or we can go back to our old habits, with major crashes that we need to recover from with blind faith in the consumer economics and credit, which can’t last as long as the former.

    • IT-Chick says:

      @Skankingmike:

      Problem is a lot of that reckless spending was by consumers who didn’t have the actual cash. It was all put on credit cards, those credit cards are now maxed – no more reckless spending. Now with the economy the way it is, everyone is trying to get out of debt and save their cash.

  7. SadSam says:

    I must be the only person in America to have hired a dog walker in the last three months.

    But our savings rate is way north of 3.6% so I guess I’m okay.

  8. MacIllini says:

    After watching the superbowl, sure in heck didn’t look like a recession in Tampa.

  9. Starfury says:

    We’ve stopped buying “stuff” that we don’t need. This has cut our monthly CC bill by about 1/3 and we’re looking to get it down by half. This includes our monthly items (phone/bridge tolls) that get charged there automatically. It’s not that I’m worried about my job, it’s the monthly “WTF did we buy?!” bill and realizing we spent a lot of money and have nothing to show for it.

    • ElizabethD says:

      @Starfury:

      I suspect many are doing this, and obviously it’s a good thing in terms of our relationship to material stuff and overspending. Our family is in the same place as yours these days, thrift-wise.

      What worries me is the domino effect: We stop spending for all but necessities, and sooner or later a retail operation closes down. Their staff joins the ranks of unemployed whose homeownership or rent payments are threatened; there goes the foreclosure rate skyward. With less buying, manufacturers cut back = more job cuts and unemployed. Then no one can afford to buy anything or live anywhere. The whole thing seems nightmarish to me! I keep having these apocolyptic fantasies of Americans wandering around dazed, in rags, through a landscape/cityscape of empty, crumbling buildings, and eating grass and insects. (Dramatic much?!)

      Our economy is based on growth and consumption, apparently. I’d like to think we can continue to unlearn the overconsumption habit while still finding ways to buoy the economy. But… what?

      • GuinevereRucker says:

        @ElizabethD: As a sort of prophet/visionary (in my own small way), I totally see what you’re talking about there. I have the same visions, and it’s already happened in the US, although maybe not QUITE as dramatic as that :)

        If this happens, then maybe we’ll understand what people in other countries go through every day, year after year. Perhaps we’ll come to realize how much we DO have as opposed to what we don’t. Maybe it will force us back to a better view of what a family is and how much we need each other.

        I dream too :)

      • TVarmy says:

        @ElizabethD: I agree. It seems we’ve built a massive machine fueled by consumerism and we’re starting to see the problems with that strategy. We shipped the manufacturing jobs overseas to countries with cheaper labor, and many of those countries artificially deflated the value of their money so that the labor was artificially even cheaper, and pretty much counted on a society of people constantly buying things they don’t really need to create new jobs. Plus, buying stuff we didn’t need excessively didn’t do the environment any favors, either.

        Now, it looks like that machine will fall apart, unless we either do something radically different, or go back to the same strategies that may have caused the problem in the first place. And most of the “radically different” ideas have a poor track record, or are entirely untested. This may sound morbid, but we may have too many people for a sustainable economy to support. I’m not trying to be pedophobic, it’s just starting to look like the truth.

  10. ckaught78 says:

    Maybe every store in America needs to hang a liquidation sign outside. I passed three circuit cities on my way to Philly this weekend and everyone of them had a completely full parking. Additionally, I made a quick stop into the King of Prussia mall and it was completely packed full of people.

    • Plates says:

      @ckaught78: There is a sucker born every minute.

    • Outrun1986 says:

      @ckaught78: But are those people inside actually buying anything, or are they just scoping out the prices? Half the time I go shopping I don’t buy anything, I am just pricing things or waiting for things to go down in price. Lots of foot traffic doesn’t always equal lots of sales.

      If everyone in those stores was buying something, I am sure several CC stores would already be liquidated and closed up due to having no merchandise left.

  11. Trai_Dep says:

    Won’t anyone think about the cat-walkers? Anyone? ANYone?!

  12. battra92 says:

    We have to save some of that money to pay for Barry’s New Deal 2.0 (with twice the Iraq and Afganistan costs!).

    Good to see people are saving I suppose. I swear that my reduction in spending has nothing to do with cutting costs (in fact I’m doing quite well, thank you) I’m just taking advantage of the situation where people are selling off their junk for cheap right now so I’m buying less and less used.

    • lannister80 says:

      @battra92: The New Deal 1.0 worked out pretty damn well, wouldn’t you say?

      • battra92 says:

        @lannister80: Actually it worsened the recession, grew government and did nothing to help most people.

        It did get the Democrats elected for a half century which is why that they claim FDR was so wonderful when he was one of our worst presidents.

        • battra92 says:

          @battra92: Worsened the Depression, darn no edit function.

          Long story short adding in all of his nationalization, Social Security, strengthening labor unions etc. kept unemployment high.