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Thread: Has the US economy turned downward since Thanksgiving ?

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    Default Has the US economy turned downward since Thanksgiving ?

    posted by GreenidLady in another thread ...
    Melonie, I don't watch the news or keep up with things as I should and you seem very educated on pretty much anything financial or economy related. Do you think the economy has gone down hill a little bit since Thanksgiving? Gas went down to almost 2 bucks per gallon and now it's back up to 2.25 plus I am noticing that folks just seem "cheaper" in general. Could it be the season expenses or is it getting worse?
    There are umpteen different 'yardsticks' which are used to measure different aspects of the US economy. Most of the ones related to business activity are rising. However, I suspect that the one you're referring to is 'disposable household income' a.k.a. 'discretionary income'. This is the amount of money your average household has left over after paying for the 'modern necessities' i.e. housing, food, car, energy, taxes etc. which can then be spent in a 'discretionary' manner on everything from Christmas presents to lap dances.

    I would agree that 'discretionary income' has dropped in the last month. Part of this is seasonal i.e. winter heating bills, higher gasoline prices. But part of this is also IMHO due to credit being 'reined in' on would-be borrowers, such that people are less reliant on spending mortgage refi money and/or high interest rate credit card money than they have been in previous years. The vast majority of Americans have been spending more money than they have taken in as net earnings for the past several years, but faltering real estate markets, rising consumer interest rates, new questions about future job security (i.e. outsourcing, Delphi, Merck), as well as the new stricter US bankruptcy laws, have IMHO caused many people to think twice this year before spending too far beyond their 'means'.

    As one of the ultimate 'discretionary expenditures', lap dances are very likely to be one if the first items to come off the priority spending list for many people who are beginning to question their own financial situation. For this reason I fear that any decline being seen in club customer spending over the past month isn't strictly a seasonal phenomenon this year.

    On the other hand, for people that already 'have' money that they can invest, this has been a good year - and the last month has been exceptional !
    ~
    Last edited by Melonie; 12-19-2005 at 03:01 PM.

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