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AP: Consumer Spending Up, Won’t Last

From those determined wet blankets at the Associated Press:

Consumer spending rises in Jan., unlikely to last

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – Consumer spending rose in January after falling for a record six straight months, pushed higher by purchases of food and other nondurable items. But the increase is expected to be fleeting given all the problems facing the economy.

A batch of fresh reports Monday showed little signs of an economic rebound, with nonresidential construction spending falling to its lowest level in more than a decade and manufacturing activity contracting for a 13th straight month…

The Commerce Department report on consumers showed spending rose 0.6 percent in January, even better than the 0.4 percent gain that economists expected.

Personal incomes rose 0.4 percent in January, partly reflecting the cost-of-living adjustments provided to millions of Social Security recipients. Still, that was better than the 0.2 percent decline economists expected.

The personal savings rate surged to 5 percent, the highest level since 1995 as consumers continued to sock away more of their incomes amid the deepening recession.

The 0.6 percent rise in spending followed a record six straight declines, including a 1 percent drop in December when retailers endured their worst holiday shopping season in at least four decades.

The January increase was driven by a sharp 1.3 percent rise in purchases of nondurable goods led by much higher spending on food. Durable goods posted a tiny 0.1 percent increase, as Americans again avoided spending on cars and other large items.

While the 0.6 percent increase in consumer spending was the largest since May, analysts do not expect the strength to continue amid a recession that’s already the longest in a quarter-century

The economic weakness is keeping a lid on inflation. A price gauge tied to consumer spending showed a modest increase of 0.2 percent in January after three straight monthly declines that reflected sharp drops in energy costs…

However, January incomes got a boost from the cost-of-living adjustment made to Social Security benefits and a pay raise given to federal civilian and military workers.

The slump in consumer spending in recent months has been tough on many of the nation’s retailers. Macy’s Inc. last month said its fourth-quarter earnings fell almost 59 percent, while J.C. Penney Co. recorded a 51 percent drop in earnings and projected a wider first-quarter loss than analysts had expected.

Wal-Mart Stores Inc., the world’s largest retailer, managed to buck the trend. The company reported better-than-expected earnings for the fourth quarter as it appeared to benefit from a wave of store liquidations at former competitors such as Circuit City Stores Inc.

Somehow our watchdog media are always surprised by good economic news.

And despite being constantly wrong, they are always quick to assure us that the good news is only fleeting.

This article was posted by Steve on Monday, March 2nd, 2009. Comments are currently closed.

19 Responses to “AP: Consumer Spending Up, Won’t Last”

  1. proreason says:

    The commiecrats don’t want and are discouraging all talk of economic recovery this year.

    The Moron can blame everything on Bush.

    They want a recovery very late in the year and next year, just in time, surprise, for the 2010 election.

  2. Euryale says:

    Guns, ammo, MRE’s, rice, water, Spam, propane, Ramen noodles, dried fruits, gold, silver, matches…

  3. Rusty Shackleford says:

    …..”This economic downturn CRISIS”

    …..”Epic proportions”

    …..”It is CRITICAL that we get this bill passed IMMEDIATELY”

    Why do I feel like the scarecrow watching the big flaming green head in the Emerald City?

    *sigh* It just keeps getting funnier and funnier. That is, in a pathetic sort of way.

  4. proreason says:

    Economist Clive Cook:

    “This budget says the Republicans had Mr Obama right all along. The draft contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal. …

    Take this budget at face value, and when Mr Obama talks about “a new era of responsibility” he does not mean: “We are all in this together.” He means: “The rich are responsible for this mess and it is payback time.” Leftist Democrats are thrilled, and rightly so. The budget has three themes: healthcare reform, public investment and unflinching redistribution. This is indeed a new social contract: we get, they pay. Liberals never had it so good.

    From the Economist (note: direct source requires a subscription).

    http://www.americanthinker.com/blog/2009/03/we_get_they_pay_liberals_never.html

    • cjokry says:

      The Economist! Really!? Man, when The Economist says you’re too liberal, you are a mega-libby!

  5. toxicbrainpoison says:

    we need careers, not jobs at walmart.

    • 1sttofight says:

      Walmart turn you down again?

      Let me guess toxicbrainpoison , journalism major paid for with daddies money?

    • Colonel1961 says:

      Why can’t a job at WalMart be a career – or at least the start of one? Ya know, work your way up the ladder…

    • proreason says:

      good point colonel.

      Where did most Walmart store managers start? Yep. As floor associates.

      There’s something magical about doing good work…….for any business.

    • Colonel1961 says:

      Thanks, PR. Unfortunately, spoiled elitists (redundant) think they should come out making six-figures and in management. They’re clueless in and about the real world.

      p.s. we’re rapidly reaching the 1,000 hour mark for BHO’s decimation of this country. The DJIA is below 7,000. Thanks to ‘The First Narcissist’ and the last two years of a democrat-controlled Congress (both houses), the American Dream is waning…

    • BannedbytheTaliban says:

      Like your political and personal ideologies, your comments are not relevant to the subject (an increase in consumer spending) nor founded in reality (there are many careers at Wal-Mart, the median salary is over $47,000. Which in actually means for all those clerks, of whom you are very disparaging, making nothing, there are just as many jobs at the top to balance it out.)

      http://www.payscale.com/research/US/Employer=Wal-Mart_Stores,_Inc/Salary

  6. Gladius et Scutum says:

    In my area anyway, consumers also spent a lot on ammunition. Seriously, all anyone has left are those really odd calibers “originally intended for hunting three legged boar in the Pipperet Marshes”. I must consider getting a rifle that can handle grizzlies, RINO’s and trolls.

    Pro: The Democrats have never had a problem “reaching across the aisle”. The knives in their hands are a problem.

  7. 12 Gauge Rage says:

    A vast majority of Americans put the country into the position it is now. I myself am no exception. I learned years ago that buying on credit was eventually going to bury me. My credit cards are all cut up now. The only one I have left is a Firestone card and the only way I can use it is for car repair. It’s been a slow process getting out of this deep hole of debt. But I blame no one for it but myself. Incidentally, I’ve noticed that I have nothing left in my possession that I bought on credit. But I can see all around me the things that I’ve paid for with cash.
    Gladius, handgun ammo is hard to find now. But there is still plenty of rifle, shotgun ammo available where I live (South Texas), especially 22LR, and 270, 30-06 calibers. Not to mention a lot of black powder arms and supplies. Hey, when all else fails there’s always muzzle loading.
    As for the sudden spike in consumer lending, I have to reluctantly agree that it’s only temporary. Because where I work in retail, I see people buying big screen HDTV sets and I know they’re only doing this as far as their income tax return lasts. They’re not putting the money away for a rainy day. So they’ll be back once again into the cycle of feast or famine.

    • BannedbytheTaliban says:

      Actually you are a positive to the economy not a hindrance. If you racked up large amounts of debt, all be it a personal negative, paying it off serves the system a little better than paying cash for the things you purchased. It created additional jobs and revenue, of course at your expense. In the long run you only ended up buying extra credit, assuming you didn’t go into default on your debts. The problem is with people not paying off their credit cards and expecting the taxpayers via democrat congressmen and POTUS to pay their debts for them.

  8. Yarddog1 says:

    Ammo will be a great investment; probably better than gold. Being a gun enthusiast, I have found ammo to be going up faster than gold. And, it is getting very scarce, indeed. I guess there are a lot of people taking up a new hobby in shooting. I also understand that there is a HUGE backorder on rapid fire guns with magazines. I guess people are taking up rapid fire shooting for fun. Buy um’ while you can. A few MREs, some rice, canned fruit and vegetables and a few gallons of water will make that day on the range a lot more comfortable, too. The guy at the gas mask store said there stock was running low. It is amazing what people are investing in these days.

  9. bill says:

    Has anyone noticed it’s cold outside and you need things to get through winter? I know I have been sending money to an elderly relative to help with her exceedingly high heating bills and other expenses.

    Plus ammo and canned goods come in handy in a barter economy.

  10. 12 Gauge Rage says:

    Then my brother-in-law has all the bases covered. His house, and ten acres of land are all paid for. Plus he buys guns and ammo every chance he gets. His gun safe is this huge monster that’s built like Fort Knox. My brother-in-law is very distrustful of the government and his pantry is always well stocked. Plus he’s getting into reloading his ammo now, just to make it stretch. He’s the sort of fellow that liberal politicians fear the most. He is the self-sufficient American who tells the government to go to hell when they tell him how to run his life.

  11. pdsand says:

    I happened to swing by the mall the other day, man it was a mad house crazy fire sale going on. I says to myself, why would these good people be trying to drum up all this business with clearance sales at Macy’s, Dillard’s, the Gap, and who knows what else in the week or so following the passage of a major so-called stimulus plan by the One? There can’t be anything to that.
    There also can’t be anything to the fact that I happened to swing by the mall in the days before and after Christmas, and there was nothing. Even Sears, which can always be counted on to have a few little tools on sale didn’t have a single thing. I says to myself, why in the middle of the year’s busiest shopping season, are these major retailers trying to kill business by selling everything at full price? There can’t be anything to any of this.


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