Everyone cuts back for recession- even well off people!

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 said the economy in America is dying down. If conditions worsen, experts believe that one more stimulus may be necessary.

Jobs created when the rich spend

Demand for goods and services create the need for additional jobs, and spending – particularly that of the top 5 percent of U.S. income earners – indicates demand. That top 5 percent, which contains 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,” according to Moody’s. As 60 percent of America’s economic fortunes depend upon consumer spending, that one-third is of super-sized significance. In May, 2010, it was found by Gallup that $ 145 per day was spent by those earning $ 90,000 or more.

In May 2009, it was 33 percent less than that. The numbers dropped in June 2010 the Times discovered. Only $ 119 per day was spent by Rich people. Were they leaning upon bank loans more than was their custom?

Luxury companies on the rocks

In early 2010, luxury business were doing very well for themselves. Hotels like Four Seasons and also the Ritz Carlton lost many sales as summer came around. Sales at luxury retailers like Neiman Marcus and Saks Fifth Avenue slowed at about the very same time. To add to this stop in spending on luxury, real estate in Manhattan and also the Hamptons has dropped significantly. It was expected that spending would slow down with the recession since normal spending would cease for a moment, but we know there’s a severe problem with even the individuals with money have nothing left to spend.

Going where you’ve to for the Dow

Considering their greater level of personal financial investment, rich people check out different indicators than the average person when it comes to evaluating the financial weather. The Dow Jones is a benchmark that means more to those who are extensively invested. Since the numbers were within the 7,000s for such a long time, we can see the affect taking place when they hit 10,000 again. Spending went up in every little thing, even car sales. Sadly, sales went down and about 15 percent of luxury sales staff were fired with no place to go for work. A study done by the Institute for Policy Studies in Washington showed that those with money stopped spending mostly because it looks bad to spend so much when everybody else is just trying to keep a roof over their heads.

Signs of an economic apocalypse?

”Apocalypse” can be a word that seems to dark for what happened, but think about 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 drop out of a tube – because today, even rich individuals are feeling the squeeze. Does anyone need a fast loan for their tube squeezers?

Citations

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