The success of many businesses has long depended on the premise that Americans want to buy their goods or services. This has worked very well over the years, however at the current time there is a problem with using this theory to predict success. While surges in holiday sales have provided many with a prediction of a return to normal this feeling is dissipating very quickly. A study will find that the majority of these sales were made by credit card which will drain even more money from potential sales in the immediate future.
In the past an employee could go on the job and stay there until retirement. Unfortunately, in most cases that is no longer true. The lack of job security, possibility of losing their home and many other factors have restricted their buying habits.
The additional factor that has added to the mix is the increase in prices on all fronts. The price of gasoline, for one, which is essential in the majority of people's lives, continues to rise. If a person has to pay fifty or more dollars to fill their tank that takes money that might otherwise be spent in the retail market.
In addition, not only the federal government, but cities and states are finding themselves in a financial bind. As a result, they are trying to increase their revenue with new fees and taxes. This is more money that is not going into the business sector.
When a person's income is depleted by these kinds of everyday costs it is going to affect consumer spending for retail goods. The basic needs of the household, such as housing, utilities, food and transportation are going to be first before making purchases that are not essential. The amount of the income received is what is going to affect how much is left over for other purchases.
In addition, many people are finding themselves loaded with consumer debt due to spending when there did not seem to be any foreseeable future income problems. As a result, many are also struggling to try to repay credit cards and other obligations that accumulated. The housing market is a prime example of this problem.
Some consumer advocates are reporting retail sales are returning to normal. Normal means that people feel secure in their future prospects and have sufficient income to cover all expenses as well as make purchases. Although this will, no doubt, occur eventually, at the current time it is not happening.
Many people have hailed the fact that reducing the social security tax on present workers will give a 2 percent shot in the arm to retail sales. What is not realized that this tax previously paid for people who have already retired, by way of social security. Reducing this amount may put a few more dollars in the market place but, in the long run, it is going to have to be made up somewhere along the line. There is no doubt that Americans want to buy but the economy is going to have to improve considerably before they have the funds to do so. Recent holiday sales were up but, if a close inspection is made, it will be found that many of these were via credit card, which will reduce the spendable income even more when the money has to be repaid.
In the past an employee could go on the job and stay there until retirement. Unfortunately, in most cases that is no longer true. The lack of job security, possibility of losing their home and many other factors have restricted their buying habits.
The additional factor that has added to the mix is the increase in prices on all fronts. The price of gasoline, for one, which is essential in the majority of people's lives, continues to rise. If a person has to pay fifty or more dollars to fill their tank that takes money that might otherwise be spent in the retail market.
In addition, not only the federal government, but cities and states are finding themselves in a financial bind. As a result, they are trying to increase their revenue with new fees and taxes. This is more money that is not going into the business sector.
When a person's income is depleted by these kinds of everyday costs it is going to affect consumer spending for retail goods. The basic needs of the household, such as housing, utilities, food and transportation are going to be first before making purchases that are not essential. The amount of the income received is what is going to affect how much is left over for other purchases.
In addition, many people are finding themselves loaded with consumer debt due to spending when there did not seem to be any foreseeable future income problems. As a result, many are also struggling to try to repay credit cards and other obligations that accumulated. The housing market is a prime example of this problem.
Some consumer advocates are reporting retail sales are returning to normal. Normal means that people feel secure in their future prospects and have sufficient income to cover all expenses as well as make purchases. Although this will, no doubt, occur eventually, at the current time it is not happening.
Many people have hailed the fact that reducing the social security tax on present workers will give a 2 percent shot in the arm to retail sales. What is not realized that this tax previously paid for people who have already retired, by way of social security. Reducing this amount may put a few more dollars in the market place but, in the long run, it is going to have to be made up somewhere along the line. There is no doubt that Americans want to buy but the economy is going to have to improve considerably before they have the funds to do so. Recent holiday sales were up but, if a close inspection is made, it will be found that many of these were via credit card, which will reduce the spendable income even more when the money has to be repaid.
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