In today’s economic news there is a report that Retailers Report Modest Sales for July. The report cites the large corporate retailers who noted a slump in July sales. Trickle down therory of course affects the small retailers, who no doubt feel the crunch of low sales harder than the big corporate retailers.
One cause of the slump in sales reported was the “rising oil prices could have also hurt spending among lower-income shoppers.” The heat-wave across the country was also indicated as a factor in the drop in sales from the month before.
The Christian Science Monitor reported yesterday that America has become a Spendthrift nation.
Americans have stopped saving for a rainy day.
Instead, they are living paycheck to paycheck, depending on credit cards to get them through emergencies, and hoping that the rising value of their homes will give them a retirement nest egg.
This personal economic chasm is showing up in the national savings rate, which has been declining for years. Tuesday, the Commerce Department reported that the personal savings rate fell to zero in June, the lowest since a one-month buying binge in the aftermath of the 9/11 attacks. The United States is on track to record a savings rate for the year below 1 percent, which would be the lowest since the depths of the Great Depression, when the rate turned negative.
The Christian Science Monitor also reported that women are more widely affected by this issue:
A recent Consumer Federation survey found the lack of savings was especially troublesome to women. More than 70 percent said they worried about their finances in the last year, and two-thirds said that unexpected expenses – things like the furnace breaking or the car needing to be fixed – were the cause of that worry.
That’s because they had little or no money set aside. More than 40 percent of all women had less than $500 in the bank. For those 25 to 34 years old, the percentage without a rainy day fund jumped to 55 percent.