It's becoming a slow motion train wreck. U.S. households are being increasingly squeezed by rising prices and shrinking incomes. According to the U.S. Commerce Department on Friday, disposable income adjusted for inflation fell another 0.3% in August. Wages also dropped as businesses continued to layoff employees or to slash their hours.
As a result, Americans saved just 4.5% of their incomes in August vs. 5.6% a year earlier. U.S. family budgets are tight and growing tighter. People are scared and they are not going to go deeper into debt to buy foreign made goods they can't afford. They are increasingly using their savings to help pay their bills. If you are an American and haven't been cutting your overhead, please do so now so you don't become overextended. And if you are a foreign investor seeking safety in U.S. government bonds, think again for the government is sinking in its vast and rapidly rising debt.
Dick
To learn more, please see "Americans Tap Savings To Keep Up With Prices," The Wall Street Journal http://online.wsj.com/article/SB10001424052970204226204576602534216317712.html
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