Consumers are actively engaging in the marketplace. They’re spending and consuming at an increasing momentum.
The Commerce Department announced on Wednesday that retail sales rose by 1.1 percent in February, marking the largest increase since September and surpassing January’s modest gain of 0.2 percent. This comes despite a 2 percent hike in payroll taxes and increased taxes for high-income earners. Interestingly, it seems that lower paychecks are not deterring consumers from spending.
This uptick in consumer expenditure signals a positive impact on the first quarter GDP, as consumer spending accounts for roughly 70 percent of the U.S. economy. But does an uptick in GDP driven by consumer spending genuinely reflect economic health?
If this increase in consumption derives from savings and capital investments, it can indeed be beneficial. Unfortunately, current consumer spending appears to be largely funded by increasing consumer debt. This trend could have long-lasting repercussions for future economic growth.
In essence, individuals are borrowing today to finance purchases for which they have yet to earn the income. Continue reading
Who’s Living Large in Retirement?
By Dennis Miller, Editor, Money Forever
When it comes to retirement, who is better off: individuals with pensions or those who have diligently saved their own nest eggs? The data may reveal surprising insights about who truly thrives in retirement.
Ultimately, what determines wealth in retirement is not solely income but the total assets accumulated over time. So who are the real affluent retirees?
Retirees typically fit into four categories: those who retired from the private sector with a 401(k), IRA, or lump-sum payout in lieu of a pension; government pensioners; self-employed individuals who have saved independently; and those relying on Social Security alone.
The U.S. Census Bureau reports that in 2010, the top 10 percent had a median net worth of $1,864,000. If you hold that much wealth, 95 percent of people consider you rich. But does that truly signify wealth? Continue reading
On an extraordinary day, the Dow Jones Industrial Average surged to a record high, closing at 14,253, surpassing its prior peak of 14,164 established nearly five and a half years ago. A remarkable achievement.
Wall Street erupted in celebration. Jim Cramer raised his fist in triumph. Just when it seemed like the day couldn’t get any better, Venezuelan President Hugo Chavez passed away—a surreal twist to an already eventful day.
Such unpredictable events color our world in ways we never could have anticipated. Would it have been possible to orchestrate a more fortuitous day? Perhaps, but it wouldn’t have been nearly as delightful.
While we generally avoid celebrating death—it’s not in good taste—humans aren’t flawless. We occasionally falter in our judgments. There have indeed been instances in the past when we’ve crossed such lines. Continue reading
Recent revelations reinforce the notion that President Obama is not only a doomsayer but also less than truthful. One of the President’s exaggerations is amusing hyperbole, while the other is purely misleading. However, their impacts pale in comparison to some other statements emerging from Washington.
As the President stirred apocalyptic fears, and Bob Woodward accused him of deception, Federal Reserve Chairman Ben Bernanke made arguably one of the most audacious claims since the President proclaimed, “If you’ve got a business—you didn’t build that.”
In addressing inquiries from Senator Bob Corker, Bernanke asserted, “my inflation record is the best of any Federal Reserve chairman in the postwar period.” Yes, he genuinely made that statement—see for yourself.
It seems Bernanke believes we’re all gullible. What else can explain such a declaration? He either lacks understanding or is intentionally misleading. Frankly, we lean toward the latter. Continue reading
