New inflation data explain middle-class squeeze

New inflation data explain middle-class squeeze

www.ajc.com

WASHINGTON — New data from the Labor Department confirm what most middle-class Americans already know: Inflation is squeezing them.
As consumer prices rose by 4.1 percent last year, the highest rate since 1990, the prices of basic essentials such as food, gasoline and health insurance climbed far more steeply, explaining why so many Americans are telling pollsters that the economy is their chief concern.
Digging deeper into the data reveals, for example, that the price of bread rose 7.4 percent last year, almost twice the rate of inflation.

(visit the link for the full news article)



[edit on 17-1-2008 by SEEWHATUDO]

Another quote from above article:

It's not just rising food prices that are pinching the budget of working Americans. The price of health insurance, another major political campaign theme, rose by 10.1 percent last year. Medical inflation also continued to outpace the broader consumer inflation rate. The price of medical care nationally rose by 5.8 percent in 2007 and the price of medical care services rose by 5.3 percent.

But consumers perhaps most felt the energy-price squeeze. Gasoline prices rose 8.2 percent on average last
year, the slowest rate of growth since 2002. But pump prices began climbing anew in October and for the last quarter of 2007 average prices rose by just more than 30 percent.

I have been saying this for a while now, inflation and the housing bust is killing middle America, esp. the lower middle class.
These people who are struggling do not care one bit about the stock market, they care about putting food on the table, taking their kids to the Dr. if they get sick and keeping their homes warm in the winter.
Lower middle class and middle class are being squeezed and squeezed hard, foreclosures and bankruptcy will seem like the only options.
What will we do when over 1/2 our country has bad credit? Can't consume with all that bad credit but our economy runs on consumerism.
This is a very serious situation and the middle class makes up the majority of our country BUT everyones running around like a chicken with their heads cut off to save the banks, save Wallstreet, save those already rich as hell corporations while the people who made them rich lose their homes, lose theis jobs, lose their health and in some cases lose their lives.
Pretty soon we will have 2 classes, the very rich and the very poor.

www.ajc.com
(visit the link for the full news article)

[edit on 17-1-2008 by SEEWHATUDO]

The sad thing is that middle class is already a dying and going into extinction breed.

It all started when our industries were outsourced to developing countries and not jobs of equal value has been created since then.

Sad but free trade was developed to kill middle class in the US.

reply to post by marg6043


yes and see this is what I dont understand...why would you systematically wipe out the class that makes the consumerism economy stay afloat? Unless there is a plan in place to change how our economy works...
or we are going to be a country where the minority is fat cats and the majority are the homeless.
I am sick and tired of hearing about these millions and billions of dollars bailing out all these worthless, piece of poop corporations that are driving the nails into the coffin of the dieing middle class.
If this government actually cared about it's citizens they would let the fat cats sink and help the middle class get back on its feet but that is never going to happen. And then where is our country? with very little consumerism, service jobs are gone and our country is starving. Well that just seems like a great plan right?

Another quote from the article...

This partly explains why the economy so frustrates Americans.
"From a standpoint of the consumer, they react to (inflation) like a tax increase. They feel less wealthy, they feel pinched and they are looking for institutions or people to blame," said William Beach, an economist and the director of data analysis for the Heritage Foundation, a conservative policy-research organization.

I find this quote funny because that is exactly what I have done in this post, I blame our government, I blame our economy, I blame the fat cats.
And they should be blamed, inflation and unemployment are out of the middle class control. Should we just sit back and say " Well we are screwed and it's all our faults" I know some on this board feel like the middle class has lived outside their means and that may be true but the issues of inflation and unemployment have nothing to do with living outside their means.
This situation will eventually effect all of the middle class but for now it is hitting the lower middle class hard and the lower middle class only dreams about that plasma TV, they don't go and buy it, they work hard to pay for essentials and every once in a while get a nice treat. In other words these people do not live outside of their means unless living outside of their means is called survival.

Originally posted by SEEWHATUDO
reply to post by marg6043

 

yes and see this is what I dont understand...why would you systematically wipe out the class that makes the consumerism economy stay afloat?

Because a slave and dependent society is easier to dominate and geared to accept any crumbs that government handle to them.

Middle class is too powerful or used to be powerful, that was not in the best interest of a corporate run government that wants control of all the wealth.

Outsourcing ensures the slow death of what once make our nation great and Capitalism so successful for the people.

See the only ones that remember what a middle class used to be are dying the generation that thrived during that time of created wealth in our nation are dying, the new generations are growing in a stale economy with no jobs to live the dream and with laws to control their every lives and monitoring their every movements.

Unless there is a plan in place to change how our economy works...
or we are going to be a country where the minority is fat cats and the majority are the homeless.

That is the thing our economy was working fine our nation was one of the wealthiest nations in the world and we controlled exports, but this became dangerous to the elites in the world.

[]It was nothing wrong with our nation until corporate power took over the government, steadily and slowly during the 80s with a culmination during the last 7 years.

I am sick and tired of hearing about these millions and billions of dollars bailing out all these worthless, piece of poop corporations that are driving the nails into the coffin of the dieing middle class.

They are in charge, they made their own laws and they will sacrificed any body to keep in power.

If this government actually cared about it's citizens they would let the fat cats sink and help the middle class get back on its feet but that is never going to happen.

No, no really is better to have a population begging at their knees because is easily manipulated.

And then where is our country? with very little consumerism, service jobs are gone and our country is starving. Well that just seems like a great plan right?

Well that is the goal, having people in debt to their necks on credit, addicted to cheap imports, working as slave workers and begging for miserable tax brakes with 300 dollar checks once a year by a magnanimous government.

Wow the flags on this are great, I would like to see more discussion on how your communites are looking or how we can combat these issues or how we will look in 20 years.
I know Marg and I are not the only 2 on this board who have an invested interest on this topic.
For those of you who think this will never get to you, it will and sooner than you will anticipate, eventually you will hit that credit line and will have to start paying with your own hard earned money.

Great thread. Revealing Stats.

What I also find interesting and jaw-dropping is all this talk today about the President's emergency economic package that's going to be rushed through in order to prop up the economy with "relief" that will hopefully stimulate consumer spending.

Someone correct me if I am wrong, but isn't the fact that this economy has been built on the backs of consumers the reason for the mess we are in now? Surely these geniuses are not suggesting that consumer spending is going to save us!?

But...after completely dismantling manufacturing and worshipping at the feet of the almighty profit gods by out-sourcing the bulk of the rest of our jobs as well as giving us all more money to spend (or should I say debt to incur) by structuring risky mortgage loans so we can spend, spend, spend - I guess consumers are all that is left.

The catch, I guess, is what will consumers be able to afford when inflation gets worse?

reply to post by kosmicjack


Where have you been? Glad to have you back!!!

As always, you are correct. When the emergency economic package came up last week and the rumors of this $1000 check, I kept saying that $1000 check is not going to help the economy because it is not going to be used for consumer spending. It will be used to play catch up on mortgages, car payments, utility bills and grocerys for much of the US.

Yep and since consumer spending is our economy and work force once the spending is gone our service jobs are gone.
Bailing the fat cats out and breaking the backs of hard working Americans seems to be the goals right now.
Screw the rest of them lets make the rich even richer!!! Oh and after all the foreclosures, who will be buying up property for pennies on the dollar???

reply to post by kosmicjack


I am looking for about one hour the congress hearing with Barnanke, they want to start stimulus packages to make people spend more like you say.

Also some senators (democrat) talking about increases on food stamps and checks so people can spend more.

What it the heck is this congress talking about?

This sounds like manipulation of the poor to made them spend more? money that they don't have.

Another congress man said that this nothing than increasing debt for the poor with credit so they can spend and boost the economy? he is right.

What kind of morons we have in our government.

People needs jobs not wellfare checks and food stamps to spend money, and definitely not credit to get into more debt.

We are on trouble, and is our own government the one that is sinking our nation

Bush is bankrupting our nation because of wars, while increasing the nation deficit to keep the nation going on money that is not there.

Now they want to keep increasing the national debt to be able to handle miserable checks to people so they can go and buy a toaster?

So the numbers look good because people are spending money?

I don't get it, I am confused, are our government officials that stupid and dumb about how the economy works?

reply to post by SEEWHATUDO


Personally, I think their figures are way low......MY grocery reciepts seem to tell a somewhat different story......(and please, check my math, tell me if I'm wrong.....)

Some items have risen as much as 30 percent, while many others are at least 10 % higher...for instance:

store brand veg oil........4/'06 price....1.86
now.........2.43
That's .57 cents diff, or a bit over 30 percent higher than the '06 price.

milk ( Mayfield) ...........4/'06 price......4.28
now......... 5.78

That's $1.50 higher, or 35 % more than the price from a bit more than a year ago, and I've been paying the higher price for several weeks already! ( And the Mayfield is a luxury, I shall have to soon forego....)

reply to post by frayed1


Yes i agree their figures are low, I am seeing an average of 25% inflation in the last 12 months and thats just on generic and staple items.
So what happens if/when the dollar tanks? With no cost of living raises (except federal employees ironic isnt it?) how do we even afford the essentials?

reply to post by marg6043


are they confused or just a bunch of rich fat cats that have never, ever had to decide between paying the electric bill or putting a tank of gas in the car?
Our government(and our candidates) have no idea what the middle class is going thru because they deal in millions and billions while we deal in hundreds and thousands. Our country would be better off if we could elect someone who actually had an idea how most of this country live.
I can imagine all I want how it would be if I was rich but never being rich I have no idea what it would be like and vice versa.

I have watched food prices SKY-ROCKET in my area over the past year. Pretty soon we're going to be like old Russia, with people standing in line hoping to get a single loaf of bread to feed our family. We are racing toward 3rd world status with the costs of housing, fuel and food outpacing our incomes like it's standing still. Only the top 1% elitists who keep profiting in these times are not affected by it.

This entire government system we have, have only one goal in mind, to keep feeding their wealthy supporters at the expenses of the hart working people in this nation.

BTW I visited My local (Super Wal-Mart) recently after a lapse of about a month, to my dismay they changed the entire grocery area and first thing I noticed what the elevated prices.

One thing that took me by surprise was the price for a can of fat free milk (that I buy by a dozen) from 80c to 1.12, that to me was outrageous.

Lies, Damned Lies and Statistics - Calculating the Consumer Price Index

...goes on to explain the magic of hedonics, geometric weighting, substitution, and seasonal adjustments that are now applied to the reported CPI. He then explains why the use of a "core rate" is a fraud.

.

reply to post by marg6043


last year generic walmart dryfoods ran an average of $1 now they are up to $1.29. That is a massive jump in 12 months.
So the dime stores turned into the dollar stores, whats next the 5 dollar store?

Gools.

Oh, no to worry we are to get a stimulus package riddle with tax cuts and 300 hundred dollars check, more welfare checks and food stamps.

Nothing about the wealth and job builders in our nation is been mention no even once.

Nothing about how to build back middle class America with industries and better pay jobs.

They are starting to handle the bread crumbs for the desperate to dig in and praise the government.

BTW the talks about the dollar completely losing his vaule and been replaced came in the hearing talks, but Bernanke dismised the idea quickly.

reply to post by Gools


Gools link is a must read for those who want to figure out why they are haveing to rob Paul to pay Mary.
So what is the future? Are we really going to be standing in food lines? Is there any fix to this? How much longer till we hit rock bottom and how do we prepare for it while juggling bills to make ends meet? And when do Americans stand up and say enough is enough?

And when do Americans stand up and say enough is enough?


[edit on 17-1-2008 by SEEWHATUDO]

Bernanke: Juice the economy 'quickly'
Fed chairman, urging lawmakers to boost consumer spending within 12 months, tags mortgage meltdown's cost at $100 billion or more.

Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow.

money.cnn.com...

What a joke is been played against the hard working American people.