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Six Figures and Clipping Coupons? Believe It

Friday, 09 March 2012 08:02 AM

A new survey of American shoppers finds that even relatively high earners are feeling insecure in their incomes and wondering if they can keep up with the cost of living, despite making $100,000 or more.

Nearly 30 percent of Americans in the $100,000 to $150,000 income bracket feel they can afford only the basic necessities and now identify themselves as middle-income, according to consultant WSL/Strategic Retail.

At all income levels, more than half (52 percent) of the country is struggling to make ends meet, and two-thirds (67 percent) of women shoppers surveyed said that they felt brand names were not worth buying. 

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A majority of respondents (68 percent) clip coupons to keep costs under control.

“There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor. Look, American shoppers are moving on and coming back to shopping, but at their own pace,” says Wendy Liebmann, CEO of WSL/Strategic Retail.

As a result, Liebmann says, retail sales are precarious and likely to fluctuate, up one month and down the next. “That’s not going to change any time soon. Brands and retailers cannot ignore this. They will need to rethink the way they do business over the next three to five years — or longer,” she says.

Things might get worse before they get better. Higher inflation could arrive sooner than most expect, Fed watchers warn.

That’s because Federal Reserve Chairman Ben Bernanke seems to considering letting inflation exceed the official target for a period in order to goose up employment numbers.

Officially, the Fed’s mandate in setting monetary policy is to seek maximum employment and maintain stable prices, that is, low, predictable inflation. Some now see Bernanke allowing prices to rise a bit faster in order to bring jobless rates down more quickly.

The Fed’s inflation target is 2 percent and it seeks an unemployment rate of between 5.2 percent and 6 percent. Currently, the jobless rate is 8.3 percent.

The current consumer price index is 2.3 percent excluding food and energy costs, or 2.9 percent counting those volatile categories.

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