While the Fed has long been focusing on the revenue part of the household income statement (which unfortunately has not been rising nearly fast enough to stimulate benign inflation in the form of nominal wages rising at the Fed’s preferred clip of 3.5% or higher), one largely ignored aspect of said balance sheet has been the expense side: after all, for any money to be left over and saved, income has to surpass expenses. However, according to a striking new Pew study while household spending has returned to pre-recession levels (the average household spent $36,800 in 2014) incomes have not.
Specifically, while the median income had fallen by 13% from 2004 levels over the next decade, expenditures had increased by nearly 14%. But nobody was more impacted than the one-third of households which the study defines as “low-income.” Pew finds that while all households had less slack in their budgets in 2014 than in 2004, lower-income households went into the red by over $2,300. Continue reading
If you’ve been following FX rates for a while, you will remember that the USD/CAD has been very steady for the last 15 years or so — normally around 1.05 with a few spikes into the 20’s and 30’s. The current rate at this moment is 1.4385. It’s the largest spread in at least 12 years. That’s 1.4385 Canadian Dollars (CAD) for every U.S. Dollar (USD).
The pictured bottle of pepper is roughly $13.22 (USD).
This isn’t limited to Canada, either. A global crisis is unfolding, as you will see in the coming posts.
It was just yesterday when we documented the continuing slide in the loonie, which is suffering mightily in the face of oil’s inexorable decline.
As regular readers are no doubt acutely aware, Canada is struggling through a dramatic economic adjustment, especially in Alberta, the heart of the country’s oil patch. Amid the ongoing crude carnage the province has seen soaring property crime, rising food bank usage and, sadly, elevated suicide rates, as Albertans struggle to comprehend how things up north could have gone south (so to speak) so quickly. Continue reading