Americans aren't spending more despite job gains and lower gas prices.

[cubby1223]

Children are the single greatest driver of economic activity, and we have an aging population with fewer kids. And young adults are waiting longer before getting married, waiting longer before having children.

 

[Matt1970]

And now, the splitting of the very finest hairs.

The chart is % of GDP. The greatest difference from 1949 to 1979 is approx 1%. That does not support the Europe in shambles hypothesis of prosperity in the slightest.

I don't agree with his reasons for our trade surpluses but I do agree with their effects. We ran trade surpluses up until around 1970, the same time when middle class wages started to decline.

 

[Hugo Drax]

How much more do they want Americans to spend. I figure by now they have a flat screen in every room, every kid has and iPhone, mom and dad each driving a leased bmw.

 

[senseamp]

Record February snow and cold have anything to do with that?

The chart is showing divergence since 2011. I doubt it's the snow.

 

[senseamp]

How much more do they want Americans to spend. I figure by now they have a flat screen in every room, every kid has and iPhone, mom and dad each driving a leased bmw.

You mean Americans have enough and the era of increasing standards of living is over?

 

[Fayd]

That doesn't explain the prosperity of the 50's & 60's when labor participation rates were even lower than today.

from the 40's onward, america was on top due to the rest of the industrialized world's factories and infrastructure getting bombed to hell, along with their being indebted to us under the Marshall plan.

but that only lasts so long.

 

[LegendKiller]

from the 40's onward, america was on top due to the rest of the industrialized world's factories and infrastructure getting bombed to hell, along with their being indebted to us under the Marshall plan.

but that only lasts so long.

Horrible correlation. If that were the case then the LFPR would be *much* higher in the late 40s-50s. Instead you see a huge climb *much* later than that. You know what it correlates to?

Baby boomers. By 67 the earliest boomers left college and entered the workforce. They created a huge influx of workers that, on a % terms, created a bubble of high LFPR as a % of the overall working population. Their numbers outnumbered the rest of the non-working people in the labor force.

Now the boomers are retiring, some early, because of economic problems. However, not enough of them are leaving, especially in better jobs, mainly because (IMHO) the assumption of higher debt (student loans for their kids, cars, houses) while asset performance didn't do as well. Too many of them spent too much during the 90s and early 00's that they simply don't have the assets to retire, especially with medical costs so high.

This is why you see low unemployment and high participation in the older generation while the younger generation has lower participation and higher unemployment. The older generation isn't retiring, making room for those below them to move up, this just rippled through the entire job market, leaving a dearth of low-end jobs.

Finally, add to this the truly fucked cohort, the millennials that exited college just as the credit crisis picked up. That generation is having a *very* hard time.

 

[Jhhnn]

from the 40's onward, america was on top due to the rest of the industrialized world's factories and infrastructure getting bombed to hell, along with their being indebted to us under the Marshall plan.

but that only lasts so long.

I already posted the trade balance graph earlier. It does not support that contention.

 

[Jhhnn]

Horrible correlation. If that were the case then the LFPR would be *much* higher in the late 40s-50s. Instead you see a huge climb *much* later than that. You know what it correlates to?

Baby boomers. By 67 the earliest boomers left college and entered the workforce. They created a huge influx of workers that, on a % terms, created a bubble of high LFPR as a % of the overall working population. Their numbers outnumbered the rest of the non-working people in the labor force.

Now the boomers are retiring, some early, because of economic problems. However, not enough of them are leaving, especially in better jobs, mainly because (IMHO) the assumption of higher debt (student loans for their kids, cars, houses) while asset performance didn't do as well. Too many of them spent too much during the 90s and early 00's that they simply don't have the assets to retire, especially with medical costs so high.

This is why you see low unemployment and high participation in the older generation while the younger generation has lower participation and higher unemployment. The older generation isn't retiring, making room for those below them to move up, this just rippled through the entire job market, leaving a dearth of low-end jobs.

Finally, add to this the truly fucked cohort, the millennials that exited college just as the credit crisis picked up. That generation is having a *very* hard time.

Add offshoring & automation to the mix to see the full effect, along with regressive taxes & financial deregulation. There's the small matter of disappeared pensions, as well.

 

[Hugo Drax]

You mean Americans have enough and the era of increasing standards of living is over?

Unless they want two flat screens per room. you should see how full of junk the garages Are in the USA. So much shit they buy on sale still in boxes etc..

 

[Hugo Drax]

Average American family expenses.
200 dollar a month in iPhones
180 dollar a month on cable and Internet
900 dollars a month on leased luxury autos
1500 a month on McMansion payments
800 dollars a month discretionary spending.
400 dollars a month on groceries

Debt of course growing, typically a negative savings rate.

Remember in the 1970s Americans did not spend so much, they had passbook savings accounts. One TV for the living room. Non luxury cars they would buy and hold on to for 6 years on average or more.

They would live in much smaller homes, ie siblings would share one room etc..

americans whine, but they have themselves to blame for not having a pot to piss in.

So yes, I think Americans are being tapped out and spending is hitting a plateau, you can only go into debt up to some limit before your done.

 

[LegendKiller]

Average American family expenses.
200 dollar a month in iPhones
180 dollar a month on cable and Internet
900 dollars a month on leased luxury autos
1500 a month on McMansion payments
800 dollars a month discretionary spending.
400 dollars a month on groceries

Debt of course growing, typically a negative savings rate.

Remember in the 1970s Americans did not spend so much, they had passbook savings accounts. One TV for the living room. Non luxury cars they would buy and hold on to for 6 years on average or more.

They would live in much smaller homes, ie siblings would share one room etc..

americans whine, but they have themselves to blame for not having a pot to piss in.

So yes, I think Americans are being tapped out and spending is hitting a plateau, you can only go into debt up to some limit before your done.

This -

This is one of the things that continually amazes me when people bitch about needing dual incomes and how we haven't been able to keep up with the same "standard" of living from 50 years ago. The problem is that there are two *huge* expenses that people didn't have 50 years ago, a $100 cell phone bill and a $100 cable/etc bill. That $200/mo matters a lot. Then there's eating out, starbucks, among many other things.

It adds up.

 

[blastingcap]

This -

This is one of the things that continually amazes me when people bitch about needing dual incomes and how we haven't been able to keep up with the same "standard" of living from 50 years ago. The problem is that there are two *huge* expenses that people didn't have 50 years ago, a $100 cell phone bill and a $100 cable/etc bill. That $200/mo matters a lot. Then there's eating out, starbucks, among many other things.

It adds up.

What amazes me is that people continue to post made-up stats.

Try this instead:

http://visualeconomics.creditloan.com/100-years-of-consumer-spending/

http://fortune.com/2014/10/31/inequality-wealth-income-us/

 

[Hugo Drax]

This -

This is one of the things that continually amazes me when people bitch about needing dual incomes and how we haven't been able to keep up with the same "standard" of living from 50 years ago. The problem is that there are two *huge* expenses that people didn't have 50 years ago, a $100 cell phone bill and a $100 cable/etc bill. That $200/mo matters a lot. Then there's eating out, starbucks, among many other things.

It adds up.

The funny thing is BMW's and Mercedes were rare sights, When you saw one usually it was a doctor or someone who really made good money. On the streets you did not see the latest autos on the road, people did not lease etc..

Now BMWS and Mercedes are common as birdshit on the streets. And people perpetually leasing automobiles is insane. Over 20-30 years it adds up. And to top it off its 2 leases.

New autos will easily last 12-14 years with standard upkeep. Just imagine how much savings the average family could have if they did not lease his/her autos.

 

[soundforbjt]

You know you can get a new Mercedes now for the same price as a higher end Camry, and used ones are not that expensive.

 

[crashtech]

If society is engaged in some reflection upon how little we actually need to live a healthy and fulfilling life, then the OP's news may not actually be that bad.

 

[LegendKiller]

What amazes me is that people continue to post made-up stats.

Try this instead:

http://visualeconomics.creditloan.com/100-years-of-consumer-spending/

http://fortune.com/2014/10/31/inequality-wealth-income-us/

So what does that consumer spending graph tell me as a % of income? Nothing. It's a % of "spending" and how it is allocated.

We're talking about spending vs saving, not spending vs spending for each income bracket. Those at the bottom end are likely spending a lot more on goods/services that are more discretionary in nature vs the top-end. The top-end is probably driving the income vs expenses.

The wealth gap doesn't mean that people can't save.

 

[senseamp]

Average American family expenses.
200 dollar a month in iPhones
180 dollar a month on cable and Internet
900 dollars a month on leased luxury autos
1500 a month on McMansion payments
800 dollars a month discretionary spending.
400 dollars a month on groceries

Debt of course growing, typically a negative savings rate.

Remember in the 1970s Americans did not spend so much, they had passbook savings accounts. One TV for the living room. Non luxury cars they would buy and hold on to for 6 years on average or more.

They would live in much smaller homes, ie siblings would share one room etc..

americans whine, but they have themselves to blame for not having a pot to piss in.

So yes, I think Americans are being tapped out and spending is hitting a plateau, you can only go into debt up to some limit before your done.

So the America we should strive for is one where people live in smaller dwellings with one TV, cheaper/fewer cars, less expensive phone, cable, and internet, and save more? Sounds like Europe to me

 

[TheSlamma]

Liberals are so funny. You claim you want the Earth to be taken care of but then you want people to go out and mass buy the shit that makes this planet a junkyard.

I wonder if there is a single one of you on earth that has actually seen the amount of energy and fossil fuels it takes to make the plastic in all your useless gadgets.

 

[Subyman]

You mean Americans have enough and the era of increasing standards of living is over?

Pretty much, there isn't much I need and I'm not even 30 yet. More plastic crap from big box stories doesn't get me off like it did those that lived in the 90's. Increasing "standards of living" seems to be a vacuum with 10% more suction or a 1db quieter garbage disposal. Diminishing returns on the people that have money. I'd rather save and buy a large area of woodland.

 

[senseamp]

Pretty much, there isn't much I need and I'm not even 30 yet. More plastic crap from big box stories doesn't get me off like it did those that lived in the 90's. Increasing "standards of living" seems to be a vacuum with 10% more suction or a 1db quieter garbage disposal. Diminishing returns on the people that have money. I'd rather save and buy a large area of woodland.

For what?

 

[Jhhnn]

Liberals are so funny. You claim you want the Earth to be taken care of but then you want people to go out and mass buy the shit that makes this planet a junkyard.

I wonder if there is a single one of you on earth that has actually seen the amount of energy and fossil fuels it takes to make the plastic in all your useless gadgets.

One doesn't need to buy "stuff" to spend money on food, entertainment & other services.

 

[blastingcap]

So what does that consumer spending graph tell me as a % of income? Nothing. It's a % of "spending" and how it is allocated.

We're talking about spending vs saving, not spending vs spending for each income bracket. Those at the bottom end are likely spending a lot more on goods/services that are more discretionary in nature vs the top-end. The top-end is probably driving the income vs expenses.

The wealth gap doesn't mean that people can't save.

You either did not read the articles or don't understand them or are purposefully playing dumb. Don't give me that "people can save" garbage when income is taxed far more heavily than capital gains. The wealthy have gotten far, far wealthier at the expense of the middle class.

 

[waggy]

why would we spend more? gas is not going to stay cheap for long. why blow it all?

 

[shortylickens]

So the America we should strive for is one where people live in smaller dwellings with one TV, cheaper/fewer cars, less expensive phone, cable, and internet, and save more? Sounds like Europe to me

We should strive for people actually paying money they have for all the shit they want. If they cant afford it they need to go back to school or start a business and make more money. We're spending too much of our income and getting into too much debt for junk we dont really need.

A big part is buying expensive crap that dies or needs replacing on a regular basis. We settle for more expensive cars that dont last as long and need higher priced maintenance. Cell phones. TV's. Computers. Tablets. Home appliances.
That kind of spending on a national scale is just as bad if not worse than Sherman burning millions of acres of farmland. Its the same as destroying value.
I'm always amazed at how much people whine about the cost of health insurance and then buy massive SUV's and tons of electronics.

Americans are dumb. They dont know how to spend money on durable goods or invest it in things that grow.