Consider these recent news items.
From my paper, the South Brunswick Post:
The nation’s economy is teetering on the edge of recession, creating hardships for families around the country.
And few know this better than a single-mother of a special needs child in South Brunswick whose school-aide salary used to be enough to cover the bills for her and her daughter.
The woman, who asked that her name not be used to preserve her privacy, said that the rising cost of utilities, food and gasoline have forced her to do something this year that she has never done before: go to township Social Services for help paying bills and putting food on the table.
She is not alone. In every month this year, the township’s Social Services food pantry has seen an increase in families seeking help. The biggest jump came in July, with 41 families needing the pantry’s assistance compared to 21 in 2007, according to Social Services Director LouAnne Wolf.
The trend is not limited to South Brunswick. America’s Second Harvest, a national food bank organization, conducted a survey in April and May of 180 food banks throughout country and found that 99 percent of the banks reported an increase in usage in 2008 compared to 2007. The average increase was between 15 and 20 percent, with 90 percent of the people citing food and gas prices as the driving factor behind the increased need.
From The Record:
Foreclosures in New Jersey rose 11 percent from July 2007 to July 2008, RealtyTrac said today . Nationally, foreclosures were up 55 percent, RealtyTrac said.
One in every 751 households in New Jersey was in some stage of foreclosure in July, compared with one in every 464 nationwide, RealtyTrac said.
Banks continue to repossess homes nationwide at a fast pace, said James Saccacio, CEO of RealtyTrac, which publishes a national database of foreclosure properties. According to Saccacio, RealtyTrac has more than 750,000 bank-owned properties in its database, representing about 17 percent of the inventory of existing homes for sale reported in June by the National Association of Realtors.
Foreclosures are rising because many homeowners who got adjustable, subprime, interest-only or other exotic mortgages during the housing boom now find that their monthly payments have re-set to higher levels that they cannot afford. Because property values have declined across most of the nation, these homeowners can’t simply sell their homes to shed their mortgage burden.
From The New York Times:
Another month of weak retail sales in July added to evidence that the spending power of American consumers has weakened considerably, despite the booster shot of billions of dollars from the government’s tax stimulus program.
Even as gasoline prices started to retreat, consumers paid more last month for imported goods, the government reported on Wednesday, as import prices rose at the fastest annual rate in 25 years.
The dour economic data put pressure on stocks, sending the Dow Jones industrial average down 109 points on Wednesday as financial shares fell for a second day. Disappointing earnings reports from John Deere, the farm equipment manufacturer, and the retail giant Macy’s also depressed investors, along with a nearly $3 increase in oil prices, which settled at $116 a barrel. The Standard & Poor’s 500-stock index fell 0.3 percent.
With the stimulus payments at an end, Americans now have fewer buffers between their pocketbooks and higher energy costs, falling home values and the tight credit market. Companies and investors are bracing for spending to fall even further this year.
“I had been hoping that the second half of the year would be better than the first half,” Michael T. Darda, chief economist at the trading and research firm MKM Partners, said. “But we’re not creating jobs in the private sector. You’ve got the credit situation getting tighter, along with stock prices coming down and home values falling. That’s a cocktail that’s going to leave a vicious hangover.”
From The Washington Post:
Inflation continued to surge in July, with food and energy prices contributing to the sharpest price increases in 17 years and helping drive down workers’ spending power at a rate not seen since 1990.
Overall consumer prices rose 0.8 percent on a seasonally adjusted basis from June to July, the third consecutive month of rapid inflation, according to government data released today. During the past 12 months, prices have risen 5.6 percent, the largest increase since January of 1991.
Energy prices increased a full 4 percent over the month, accounting for about half of the overall jump in the Consumer Price Index. Food prices also continued to rise sharply, jumping 1.2 percent from June to July.
With the economy growing slowly, federal policymakers are watching inflation closely to see if the fall-off in economic activity will relieve pressure on prices. So far, however, that has not been the case, particularly with energy prices rising quickly and oil in particular moving to record highs.
Not exactly a rosy picture of the economy.
Hank Kalet 