What does this tell you?:
Wealthy Are the Only Ones Spending, by Phil Izzo: Retail sales are expected to have increased a bit in May, but a new poll indicates that the spending is primarily coming from wealthier and older consumers.
The government releases its report on retail sales for May tomorrow, and economists [predict] total sales increasing 0.2% from April. ... But a new poll from Gallup indicates that consumers who make more than $90,000 account for the bulk of that spending increase. ...
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.’”
The result is consistent with the picture in the U.S. labor market. In May, the headline U.S. unemployment rate declined to 9.7% from 9.9%, but all of the gains came from workers with a bachelor’s degree or higher, which tend to include the highest paid workers. ... The unemployment rate jumped to 15% for those with less than a high school diploma and climbed to 10.9% for high school graduates. ...
Posted by Mark Thoma on Friday, June 11, 2010 at 12:24 AM in Economics, Income Distribution |
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