Tag Archives: Crimping consumer spending

Obama gas prices facts September 17, 2012, 2 dollars more per gallon under Obama, Crimping consumer spending, Slowing already weak US economy

Obama gas prices facts September 17, 2012, 2 dollars more per gallon under Obama, Crimping consumer spending, Slowing already weak US economy

“Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”…Barack Obama 

“The price of gas has risen 2 dollars since Obama took office. This has impacted the price of consumer goods, groceries, the economy and jobs. Please explain to me how we are better off now than when Obama took office.”…Citizen Wells

“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command. His heart sank as he thought of the enormous power arrayed against him, the ease with which any Party intellectual would overthrow him in debate, the subtle arguments which he would not be able to understand, much less answer. And yet he was in the right! They were wrong and he was right. The obvious, the silly, and the true had got to be defended. Truisms are true, hold on to that! The solid world exists, its laws do not change. Stones are hard, water is wet, objects unsupported fall towards the earth’s centre. With the feeling that he was speaking to O’Brien, and also that he was setting forth an important axiom, he wrote:

Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.”…George Orwell, “1984″

From the Boston Globe September 16, 2012.

“Higher gas prices are crimping consumer spending and slowing the already-weak U.S. economy. And they could get worse in the coming months.

The Federal Reserve this week took steps to boost economic growth. But those stimulus measures are also pushing oil prices up. If gas prices follow, consumers will have less money to spend elsewhere.

The impact of the Fed’s actions ‘‘is likely to weigh on the value of the U.S. dollar and lift commodity prices,’’ said Joseph Carson, U.S. economist at AllianceBernstein. ‘‘We would not be surprised if (it) fueled more inflation in coming months, squeezing the real income of U.S. workers.’’

Americans are already feeling pinched by high unemployment, slow wage growth and higher gas prices.

Consumers increased their spending at retail businesses by 0.9 percent in August, the Commerce Department reported Friday. But that was largely because they paid more for gas. Excluding the impact of gas prices and a sizeable increase in auto sales, retail sales rose just 0.1 percent.

Perhaps more telling is where Americans spent less. Consumers cut back on clothing, electronics and at general merchandise outlets — discretionary purchases that typically signal confidence in the economy.

Gas prices have risen more than 50 cents per gallon in the past two months. The national average was $3.87 a gallon on Friday. Most of the increase took place in August, which drove the biggest one-month increase in overall consumer prices in three years, the Labor Department said Friday in a separate report.

‘‘Consumers were not willing to spend much at the mall since they are feeling the pump price pinch,’’ said Chris Christopher, an economist at IHS Global Insight.

Weaker retail sales will likely weigh on growth in the July-September quarter. Economists at Bank of America Merrill Lynch slashed their third-quarter growth forecast to an annual rate of only 1.1 percent, down from 1.5 percent. That’s not nearly fast enough to spur more hiring, which has languished since February.

The Fed is hoping to kick-start growth with a series of bold steps announced Thursday that could make borrowing cheaper for years.

It plans to spend $40 billion a month to buy mortgage bonds to make home buying more affordable. It also pledged to keep short-term interest rates near zero through at least mid-2015.

And Fed Chairman Ben Bernanke said the Fed will continue its efforts — and intensify them if necessary — until the job market improves ‘‘substantially.’’

The announcement ignited a two-day stock market rally that sent the Dow Jones industrial average to its highest level since December 2007, the first month of the Great Recession.

But the Fed’s actions also helped move oil prices briefly above $100 a barrel Friday for the first time since May. They fell back slightly, but were still up 74 cents to $99.04 a barrel in mid-afternoon trading.

Carson noted that the Fed’s previous rounds of bond-buying pushed up commodity prices and fueled greater inflation. That weakened the ability of U.S. consumers to spend and likely slowed growth, he said.

He expects the same thing to happen again.

The Fed’s moves can push up oil prices in several ways. The Fed creates new money to pay for its mortgage bond purchases. That increases the amount of dollars in circulation and can lower their value. Oil is priced in dollars, so the price tends to rise when the dollar falls. That’s because it costs more for overseas investors to purchase dollars to buy oil.

Lower interest rates also push investors out of safer assets, such as bonds, and into riskier investments, such as oil, in hopes of a greater return. And if the Fed’s moves accelerate growth, that would increase demand for oil and gas and also raise their prices.

Higher gas prices are eating up a bigger share of Americans’ incomes than in previous years. Spending at the pump accounts for 8.2 percent of the typical family’s household income, according to Fred Rozell of the Oil Price Information Service. That’s just below last year’s 8.3 percent.

Those represent the biggest slice of household income spent on gas since 1981. The typical household spends about $342 per month on gasoline. Before gasoline prices began rising in 2004, households spent less than $200 per month, Rozell said, under 5 percent of median income.”

Read more:

http://www.boston.com/business/news/2012/09/16/rising-gas-prices-crimp-americans-spending/HYCdhf6O46tUDYlRneQ7qN/story.html

From Citizen Wells March 17, 2012.

 

Inflation has been downplayed as well. Anyone visiting a grocery store for the past several years has watched food prices skyrocket, mostly due to rising gasoline prices.

From America’s North Shore Journal March 17, 2012.

The Bureau of Labor Statistics (BLS) keeps track of the average retail price for a number of common items as a U.S. city average. Let’s take a look at a few. We used the price for the month President Obmam was inaugurated, January 2009, and the last month of data available, December 2011. The items are sorted in descending order by the percentage increase of the price during the Obama administration.

Obama Obama
Item Unit Jan 2009 Dec 2011 I/D Perc
Gasoline, unl reg gal $1.787 $3.278 $1.491 83.44%
Fuel oil, #2 gal $2.509 $3.777 $1.268 50.54%
Ground beef lb $2.357 $2.921 $0.564 23.93%
Sugar, white lb $0.569 $0.703 $0.134 23.55%
Bacon. Sliced lb $3.730 $4.550 $0.820 21.98%
Cookies, Choc chip lb $3.114 $3.682 $0.568 18.24%
Spaghetti & macaroni lb $1.131 $1.306 $0.175 15.47%
Eggs, A lrg doz $1.850 $1.874 $0.024 1.30%
Electricity kwh $0.126 $0.127 $0.001 0.79%
Lettuce, iceberg lb $0.944 $0.947 $0.003 0.32%
Milk, whole gal $3.575 $3.565 -$0.010 -0.28%
Potatoes, white lb $0.676 $0.666 -$0.010 -1.48%

CPI Food 2009-2011

https://citizenwells.wordpress.com/2012/03/17/obama-change-in-gas-and-food-prices-higher-gas-prices-threaten-economy-jobs-added-millions-of-jobs-and-job-seekers-lost-won-whip-obama-now/

Gas prices for the latest month.

Only a fool would believe that they are better off now than when Obama took office.

***  Noteworthy comment ***

“CW “Only a fool would believe that they are better off now than when Obama took office”

Citizen Wells,
Some are better off now. The Communist party of America is better off. The Islamic people are better off. China is better off. The union pensioners of General Motors are better off. The Teachers unions are much better off. The drug dealers have been supported by millions of new disabled or unemployed americans with federal money to spend, are better off. The media, taking billions in government money are better off and still talke for Obama (perhaps save the newspapers). Those whom rely upon others to work while they receive government money, including aliens, are better off.

Since taking over congress in 2007, then the Presidency and Congress in 2009, I and most Americans are not better off. We have lost most of our life’s earnings and retirements. Some have lost their homes, and many their jobs. They have trouble, after paying taxes on their lower salaries, of giving their children a chance at better education. We are now forced, unless muslem, to purchase products from the government and support government union workers as well as GM union workers while they further add burdeon to our lives. The US Constitution, US jobs, US manufacturing, US middle class, we have been thrown under the bus. The United States isn’t better off, but many democratic party special interests have made out well.”

Pete

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