What a contrast!
Even as the Dow Industrials soared to the index's highest close of the year (11,435) on Nov. 4, consumers must continue to scramble for ways to save money. Consider this description from an AP story, as quoted in the October Elliott Wave Financial Forecast:
"Demand is rising for kitchen and bath gadgets that squeeze out the last blob of toothpaste and help get the suds out of tiny slivers of soap. Big companies like Wal-Mart and the Container Store and a long-time 'As Seen on TV' pitchman are stocking up on items claiming to help people save a buck such as:
· Caps that keep the fizz in opened soda cans.
· Digital day counters: Gizmos that count the days and hours food has been in the refrigerator.
A.J. Khubani, the man behind many 'As Seen on TV' gadgets, said more than half of Telebrands’ gadgets, sold online and at 90,000 stores, are now focused on helping shoppers be cheap."
That same issue of EWFF also reported that
"Campbell’s Soup is suddenly in a battle with 'lower-priced private label soup companies.' Says the president of the world’s largest soup company, 'There is a palpable change in consumer buying behavior that is unlike anything we have experienced certainly for a few decades. They are being more surgical with their shopping.'"
This has been called the "new frugality" among consumers. A Nov. 5 news report from Reuters offered one reason for this thrift, and explains how it put a damper on the 151,000 non-farm payrolls increase:
"October's strong jobs growth, however, failed to make a dent in the lofty unemployment rate, which remained at 9.6 percent for a third straight month, in line with market expectations.
"Analysts say the economy needs to create at least 125,000 jobs a month to start bringing the unemployment rate down, but economic growth remains rather sluggish nearly 1-1/2 years into the recovery from the worst recession since the 1930s."
So along with portfolio losses in recent years, millions of people now live with a frugality factor that includes the uncertain economy.
What a contrast!
And once again -- as stocks climbed 200-plus points on Nov. 4, here is what newly-elected and sitting state governors are facing:
"States face what could be their worst budget years ever, with combined deficits potentially topping $140 billion, according to the Center on Budget and Policy Priorities, a Washington think tank.
"This comes after many states already have raised taxes and slashed spending, leaving brand-new governors with fewer examples of waste, fraud and abuse to cut."
Associated Press, Nov. 4
What's wrong with this picture?
In nearly every neighborhood, households are cutting back on their spending. States are practically broke. Yet, Wall Street soars!
Are we facing another 2007 -- when the market climbed for most of the year while the economy was crumbling?