Cash Flow Problems
by digby
This isn't good:
Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.
The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month. The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor.
“Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food,” said Tavares, who’s based in Atlanta. “That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.”
Rising costs of food and gasoline are leaving Americans less money to spend discretionary items, slowing the pace of the recovery, Tavares said. Household spending accounts for about 70 percent of the world’s largest economy.
After-tax income adjusted for inflation fell 0.1 percent from January through May, according to figures from the Commerce Department. The drop came as Labor Department data showed energy prices rose 8.2 percent and food climbed 2 percent during the same period.
The good news is that just as soon as they solve every problem projected to emerge after 2035, the government plans to take a look at that one and see if they can't do a little something about it. So that's good.
Update: We simply must tackle that deficit problem in 2046 or the country will go to hell in a handbasket. It's the responsible thing to do.
New claims for unemployment benefits rose more than expected last week, a government report showed on Thursday, pointing to a labor market that is struggling to regain momentum after job growth faltered in the last two months.
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