Consumer Spending Implosion Alert: Americans Spend 4% Of Their Paycheck On Gas, 2% More On Payroll Taxes, Employers Cut Workers’ Hours To Sidestep Obamacare, And Inflation Is Starting To Kick In
Paid over $4.00 a gallon this weekend. This high this early in the year brings the gas price back on the macro radar screen.
The EIA notes,
Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes, according to EIA estimates. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount.
The trend is not our friend.
The U.S. saw unusually high gas prices in February, a month not known for being a driving season.
The short answer is refinery maintenance and outages mostly related to preparations for the summer gasoline blend switch, according to AAA analyst Avery Ash. Refiners appear to be preparing for this switch earlier than usual, he said.
The long answer is that worldwide demand is heating up again, according to the EIA.
For as picked over and criticized as the Fiscal Cliff deal has been over the last few days, a tax break getting less attention than may have been expected is the one thing that impacts anyone taking home a paycheck. With the expiration of a temporary Social Security payroll tax everyone’s take home pay just fell 2%. The question is whether or not the reduction is going to be more of a problem than most investors think.
“This hurts seriously,” says Brian Sozzi, chief equities analyst NBG Productions, warning that next week Americans will feel “payroll shock.”
Thank you Obamacare for cutting my hours and fucking up the system. #pissoff
@KateRogersNews “In and Out” fast food chain is reducing hours. Full time is now less than 28 hrs/wk.
Part-time America: How we increased our part-time for economic reasons workforce by 4 million people since the recession began. Healthcare costs encourage low wage employers to hire more part-time employees.
Rumors of the spendthrift American consumer may be slightly exaggerated. Bankrate’s 2013 February Financial Security Index found that a majority of consumers — by a narrow margin — say they have more savings than credit card debt.
For more than half the country, 55 percent, an emergency fund outweighs credit card debt. Nearly a quarter, 24 percent, admit to having more debt on plastic than money in the bank, while 16 percent say they have neither credit card debt nor savings. That puts 40 percent of the population close to the edge of ruin while everyone else seems to be sitting pretty.
Even if the minimum wage kept up with inflation since it peaked in real value in the late 1960s, low-wage workers should be earning a minimum of $10.52 an hour, according to the study.
Between the end of World War II and the late 1960s, productivity and wages grew steadily. Since the minimum wage peaked in 1968, increases in productivity have outpaced the minimum wage growth.
Mannarino says, “This is a very dangerous game the Fed is playing. It is very scary. They are creating a greater and greater imbalance between the supply and demand for the U.S. dollar. . . . Inflation is starting to kick in, and it’s just the beginning.” Join Greg Hunter as he goes One-on-One with Gregory Mannarino from TradersChoice.net.