Stagflation Now
Posted: May 27, 2008
More consumers in May than in
April feel they are unable to afford to maintain their current level of
spending. Stagflation, an ugly mix of rising
prices and static or falling income, afflicts the nation.
The percent of consumers
reporting income increases in the past month declines from 20% in February to
12% in May. Simultaneously, the percent
reporting prices have increased in the past month jumps from 67% in February to
a hysterical 90% on May.
The proportion of the
population reporting that their finances – savings plus income versus debt plus
spending – are out of balance and likely to get worse increases from 11% to 18%
between February and May.
Simultaneously, the percent whose financial situation can be
characterized as “great” declines from 25% in February to 18% in May.
The Consumer Affordability
Index (CAI) which tracks consumer feelings about the balance between their
income and savings versus debt and spending has declined progressively from 91
in February to 78 in May.
Looking ahead, the percent of
consumers who expect their incomes to keep up with or stay ahead of rising
prices decline from 21% in February to 15% in May.
Fewer consumers report they
have money left over for savings at the end of the month – 43% in February to
34% in May. More consumers in May (38%) than in February (31%) report their
incomes are less than what they need to live comfortably.
While some pundits say the
economy is nearing a bottom, consumers do not. More consumers in May 58% than
in February (49%) see the economy as getting worse rather than better.
Consumer concern about the
economy as a major problem facing the nation has grown progressively diminishing
their concern with immigration and social problems.
By all survey measures,
consumers are having a harder and harder time getting along and paying their
bills. They see no end in sight.
Contact Us if
you want to notified of continuing updates or want to access to
detailed data on the relation between economic condition and consumer
spending.
