One might think that $11 dollars less per month in food stamps for an individual is not a big deal. But considering the maximum monthly amount one could have is $200 a month, now $189, it is. A whopping 15% of the population are on food stamps and now will experience a 5.4% cut in benefits, just in time for the holidays. As of July 2013, 47,637,407 people were receiving SNAP benefits.
Personal Income and Outlays for February 2010 was released today. PCE is what the press calls consumer spending and it rose 0.3%. The below graph shows the hit Americans have taken in good old fashioned income this recession.
Confidence among U.S. consumers rose this month to the highest level since September, reinforcing signs that the worst recession in half a century is abating.
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“Consumers are looking at things like the rise in stocks, they are listening to reports talking abut ‘green shoots’ and they believe it,” Chris Low, chief economist at FTN Financial in New York said in an interview with Bloomberg Television. “They believe that a recovery is coming but they don’t see it in their current job prospects.”
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The Reuters/University of Michigan index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 69.4 in May from 63.1 the prior month.
This may be the most important economic graph of the year:
Why? The above graph shows gasoline consumption in the US. The dotted blue line is April 2007-March 2008, the yellow line the remainder of 2008, and the chained red line this year's consumption.
Let us make a not unreasonable assumption that this recession is going to be somewhat "L" shaped or at least a Verizon-logo like elongated "V" with a very slow recovery after hitting bottom. Let's also assume optimistically that we are somewhere near the bottom of the cliff -- the inflection point of the "L" or "V".
How much of a recovery we get -- or worse, if we get a double-dip "W" recession -- is likely to be substantially determined by the price of Oil later this year.
The shock of "Black September", at least on consumer non-durable spending, might be wearing off somewhat. Like Freddy Kreuger, Michael Myers, or Jason Voorhees, it appears that American consumer simply refuses to stay dead, but instead is rising, zombie-like, from the grave to spend another day.
Private retail service Shoppertrak issues weekly bulletins about foot traffic and sales in the nation's malls. While not a perfect indicator, it is both more frequent and also a separate source to compare with the official data. In the past it has provided early indications of the holding up -- or not -- of the consumer. For example, by the end of September it had published a special note on the collapse of foot traffic that month, the first indication of the appearance of the consumer collapse of "Black September."
might be wearing off somewhat. Like Freddy Kreuger, Michael Myers, or Jason Voorhees, it appears that American consumer simply refuses to stay dead, but instead is rising, zombie-like, from the grave to spend another day.
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