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Wealthy Reduce Buying In A Blow To The Recovery - U. S.

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http://www.nytimes.com/2010/07/17/business/economy/17consumers.html?_r=1&src=me&ref=business

The economic recovery has been helped in large part by the spending of the most affluent. Now, even the rich appear to be tightening their belts.

Late last year, the highest-income households started spending more confidently, while other consumers held back. But their confidence has since ebbed, according to retail sales reports and some economic analysis.

“One of the reasons that the recovery has lost momentum is that high-end consumers have become more jittery and more cautious,” said Mark Zandi, chief economist for Moody’s Analytics.

That cautious attitude stems in part from concerns about global instability, especially in Europe, and in part from the volatility of the stock market in recent months. Major stock indexes fell sharply on Friday, after several big companies announced disappointing earnings. Bank stocks were the biggest losers as investors wrestled with the twin issues of lower trading profits from Citibank and Bank of America and the prospect that new financial regulation would further crimp their businesses.

Though stock performance has a bigger psychological and financial impact on high-income households, consumers of all income levels are fretting more about their financial future, perhaps bracing for the possibility of another economic contraction. Consumer confidence slumped in July to its lowest point since August 2009 in the Thomson Reuters/University of Michigan index released on Friday.

The Dow Jones industrial average slipped 261.41 points to 10,097.9 on Friday, for a loss of 2.52 percent. For the year, broad-based stock indexes in the United States all show losses of more than 3 percent.

Even Federal Reserve policy makers have acknowledged that the recovery is losing steam and suggested that should conditions worsen further, additional stimulus may be needed, according to minutes of their last meeting, released on Wednesday.

Especially at this stage of a recovery, businesses and economists want to see people of all incomes spending more, because the demand for goods and services would in turn encourage companies to hire workers. The American consumer accounts for an estimated 60 percent of the country’s economic activity.

Looks like the spendless recovery is gathering momentum.

Still I'm sure it's a temporary blip in the global recovery and a bit more stimulus is bound to fix it all.

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Especially at this stage of a recovery, businesses and economists want to see people of all incomes spending more

What on earth are these people on?

(1) There is no recovery;

(2) where are people supposed to get the money from?

Edited by Errol

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Especially at this stage of a recovery, businesses and economists want to see people of all incomes spending more

What on earth are these people on?

(1) There is no recovery;

(2) where are people supposed to get the money from?

Obviously economists can't quite understand that what we are going through is completely unlike the standard inventory adjustment recessions that were the norm decades ago.

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I agree

How can there be a recovery until the poison has been purged from the system.

The rich only spend because the QE/Bailouts went straight into asset values either raising them or reducing the cost of hoarding them.

I dont want to return to the UK and start a business the rents are still to high and to by a house is still to expensive.

In Tunis flats are still over 150,000 pounds and houses over 250,000 towers of empty flats sit about waiting for mugs.

I see no correction.

You not going to get me to spend my savings buy staving me out, I will blow the lot when I see bargains.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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