Cut back for all – including rich individuals!
Wealthy people are doing the spending with the economy needing to be stimulated. But now the New York Times reports that even the big spenders have roped in their purchases. The Federal Reserve has acknowledged that America's economic recovery has slowed. If conditions worsen, experts believe that one more stimulus may be necessary.
New jobs made with spending by the wealthy
New jobs are only created when individuals are spending money, especially those who are in the top five percent of income earners within the US. That top 5 percent, which consists of those earning $ 210,000 or more annually, accounts for "one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts," as outlined by Moody's. The economy depends on 60 percent of spending meaning that one third matters quite a bit. Gallup found that those earning $ 90,000 or more – their "upper income" classification – spent $ 145 per day in May 2010. In May 2009, it was 33 percent less than that. Unfortunately, the numbers for June 2010 were substantially lower, reports the Times. Only $ 119 per day was spent by Rich people. Were they leaning upon bank loans more than was their custom?
Companies just for Luxury doing very badly
Early in 2010, luxury business showed strong numbers. When summer began, hotels that normally would have more business, the Ritz Carlton and Four Seasons, were dropping in sales. Retailers such as the Neiman Marcus and Saks Fifth Avenue had sales go down around the same time. Wealthy individuals are also buying less real estate in Manhattan and also the Hamptons along with this sudden stop in spending. We know those low on money have to use an occasional fast loan to try and get by, but we know there's a problem when the wealthy spending begins to die.
Following where the Dow takes you
When it comes to deciding how the economy is doing, wealthy individuals consider different things than the average person. The Dow Jones is going to mean a lot to those who are invested than everyone else. The psychological affect happened right after the numbers got back to 10,000 after being within the 7,000s for so long. Spending went up in everything, even car sales. Unfortunately, sales went down and about 15 percent of luxury sales staff were fired with no place to go for work. Even for those rich people who can still afford to spend, the psychological impact of looking like a glutton when the majority of the country pinches its pennies keeps them from spending more, according to studies by the Institute for Policy Studies in Washington.
Is there going to be an economic apocalypse?
Although "apocalypse" might seem too strong, you might want to consider it. Linda Stasiak, a high-end skin care product saleswoman, has found the one single item that has experienced the top sales increase is the $ 15.95 tube wringer. It's designed to squeeze each and each and every drop out of a tube – because today, even rich individuals are feeling the squeeze. Need a tube squeezer with a fast loan? Article resources: New York Times nytimes.com/2010/07/17/business/economy/17consumers.html?_r=1 Has the recession changed our perception of wealth? youtube.com/watch?v=aCsIoHMxazs
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