The US economy is dry, with consumer spending weak, personal income down and consumer credit still falling. Retail sales in the US have been falling now for months, personal incomes remain weak and even though the number of hours worked and the average hourly wages increased marginally in July (but still increased) American consumer remain battered and bewildered and only interested in spending on essentials.

Crikey has crunched the numbers:

  • 9.4%: the US unemployment rate from the July jobs figures just out. The figures were encouraging with fewer than expected jobs lost. The headline news pushed markets up and the US dollar higher in something of a surprise.
  • 0.1: the percentage that the US unemployment rate actually fell.
  • 247,000: the number of US jobs lost last month. Fewer than expected jobs were lost. But the underlying news is depressingly similar to that in June, March and December.
  • 48: The percentage of American homeowners who could find their homes worth less than their mortgages by 2011, against the current figure of 26%, according to  The Deutsche Bank survey. Deutsche Bank says the increase will be largest among the best quality housing loans, which means the problems could increase once again on bank balance sheets and further cut lending. If this happens, it will require the US Government and the Fed to maintain their multi-trillion dollar support lines for much longer than anticipated.
  • 25: the percentage of the improvment in job losses from June that can be put down to government hiring; private employers are merely cutting more slowly than in the first quarter.
  • 422,000: the number of people who abandoned their search for work in July. The fall in the unemployment rate reflects this. If the green shoots continue emerging, these and millions more will emerge to look for job, driving the unemployment rate past 10%.
  • 5 million: The number of long term unemployed (those jobless for 27 weeks or more) in the US. The number rose by 584,000 over July.
  • 1 in 3: the ratio of unemployed persons in July who were jobless for 27 weeks or more.
  • 4.7: the percentage that wages and salaries have fallen over the last twelve months, the most since record keeping began in 1960.
  • $917 billion: the amount that Americans still have on their credit cards.
  • $US2.503 trillion: The overall amount of US consumer credit. The figure from the Federal Reserve actually fell in June for the fifth straight month, dropping a seasonally adjusted $US10.3 billion, or 4.9%. The figures show that US lenders continue to tighten lending standards due to growing concerns about default risk from job losses and loan foreclosures. Consumer credit began contracting last August, the first decline since January 1998. It rose in September before contracting again and fell for three consecutive months to end 2008.
  • $5.3 billion: The amount that revolving credit, which includes credit card debt, fell, to $917 billion, or 6.8%.
  • $5.1 billion: The amount that non-revolving credit — which includes auto and student loans — decreased by: 3.8%, to $1.586 trillion.
  • 5.2: the percentage that consumer credit fell by in the second quarter, according to the Fed figures. That’s the biggest quarterly fall for decades.
  • 0.1: the percentage that consumer spending fell in inflaction adjusted terms. The consumer credit figures came after figures earlier in the week showed personal income in June fell 1.3% from May and real disposable income from 1.8%. According to The Washington Post’s Ticker blog, this marks the longest pullback in consumer credit since the second half of 1991.
  • 70: the percentage of the US economy that is based on consumer spending.
  • $787 billion: the amount of money that the US government will spend stimulating the economy over the next year.

Peter Fray

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