CHANGE SIZE

Stagflation Now

Posted May 25, 2008

highlight

More Americans in May than in April found themselves unable to afford to sustain their current standard of living. We are ready to make fundamental change in how we live.

Other Articles

More consumers in May than in April feel they are unable to afford to maintain their current level of spending. Stagflation, an ugly mix of rising prices and static or falling income, afflicts the nation.

The percent of consumers reporting income increases in the past month declines from 20% in February to 12% in May. Simultaneously, the percent reporting prices have increased in the past month jumps from 67% in February to a hysterical 90% on May.

The proportion of the population reporting that their finances – savings plus income versus debt plus spending – are out of balance and likely to get worse increases from 11% to 18% between February and May. Simultaneously, the percent whose financial situation can be characterized as “great” declines from 25% in February to 18% in May.

The Consumer Affordability Index (CAI) which tracks consumer feelings about the balance between their income and savings versus debt and spending has declined progressively from 91 in February to 78 in May.

Looking ahead, the percent of consumers who expect their incomes to keep up with or stay ahead of rising prices decline from 21% in February to 15% in May.

Fewer consumers report they have money left over for savings at the end of the month – 43% in February to 34% in May. More consumers in May (38%) than in February (31%) report their incomes are less than what they need to live comfortably.

While some pundits say the economy is nearing a bottom, consumers do not. More consumers in May 58% than in February (49%) see the economy as getting worse rather than better.

Consumer concern about the economy as a major problem facing the nation has grown progressively diminishing their concern with immigration and social problems.

By all survey measures, consumers are having a harder and harder time getting along and paying their bills. They see no end in sight.

8SAGES.com continues to track the economy and explore the effects of recession and inflation on various segments of the consumer population. Contact 8SAGES.com with questions or with requests for being alerted to new developments.

ALSO SEE PREVIOUS BACKGROUND ARTICLES

Recession Bite – Stagflation Looms Update April 21,2008

Recession Bite – Stagflation Looms March 27, 2008