Further proof that this recovery is only truly a recovery at the top. This article from the New York Times captures more evidence that the rich are benefitting more than the rest of society in this recovery:
Apparel stores are holding near fire sales to get people to spend. Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria’s Secret to the Children’s Place are nudging prices up by just pennies, worried they will lose customers if they do anything more.
That’s the situation retailers who sell to the middle and lower classes face. Unemployment is still high, consumer spending is still down, and as the last article from the NY Times I wrote about said, the jobs that are being created in our economy are overwhelmingly paying low wages -$12/hour and less, meaning that these problems are not going to go away any time soon. Average retailers are in for a long, slow recovery just like the consumers they depend on.
However, luxury retailers are doing fantastically, since the rich have decided it’s ok to spend money again:
The luxury category has posted 10 consecutive months of sales increases compared with the year earlier, even as overall consumer spending on categories like furniture and electronics has been tepid, according to the research service MasterCard Advisors SpendingPulse. In July, the luxury segment had an 11.6 percent increase, the biggest monthly gain in more than a year.
So life is good if you’re already sitting on piles of money, but for the rest of us, the bad times seem to be very slow to leave. And yet, the deal just passed in Congress to raise the debt ceiling pretty much eliminates any option to use government spending to prop up the economy. Keynes is probably spinning in his grave.