Holiday Shopping Shows Income Gap

Some analysts and investors are reporting this year that "the American consumer is back," but in actuality, it's "some consumers." This shopping season has shown America the big picture of the growing income gap between upper and lower income households. This is largely due to the unemployment outlook. Those on the higher end are feeling more secure in their jobs and their incomes increasing, so they are willing to buy much more this year. Statistics say that the unemployment rate for those with a college degree is at 5%. However, those on the lower end are facing an unemployment rate of about 16% and a decrease in wages. This causes them to not feel very secure in their jobs and forces them to focus on necessities. Retailers that cater to low-income families, such as Wal-Mart are seeing decreases in revenue, while retailers geared towards high income families are experiencing their best sales this season of the past three years. Some days they have even had to close their stores because they ran out of merchandice! These high-income households are so confident in spending because in the third quarter this year they've seen their household net worth jump up by $1.2 trillion because the stock market saw a $1.9 trillion rise in financial assets. People who are weathy are now very willing to pay top dollar for luxury brands. Online retailers are also showing strong sales this year as they are up 12% overall. Still though, low-income households are having a hard time, largely due to the falling value of real estate and the fact that they don't own any stocks or bonds. The "rich" are the ones spending this year and who are increasing overall spending data, while the "average" and low-income people are not. Overall, the American consumer is still depressed, but a growing number are not.

I find this article hesitantly optimistic. I think it's heartening because it's saying that there are some people who are willing to spend money--and alot of it--again. Although these are just the weathy Americans, at least it's some. It's been 3 years since the weathy have spent as much as they are now.This may be one of the first signs that the economy is turning around. I mean, low-income families can never really spend alot money, because they just don't have it. They may not be buying as much as before the recession, but I don't think they were ever really able to make purchases like the high-income households, and therefore they probably wouldn't have as much of an effect on the overall consumer statistics and economy. I do find it unfortunate, though, that there has to be such a gap between the "rich" and the "poor." There is something not right in our government if the rich can continue to get richer while the poor continue to get poorer, which is what seems to be happening. If we truely are coming out of the recession, then I would think both ends would be seeing improvements, not just the weathy. That's why I'm hesitant to believe this article is a "good sign."
http://www.msnbc.msn.com/id/40593905/ns/business-stocks_and_economy/