People spending faster than they're earning

The normal American consumer spends more. This started after 2008 with the economic meltdown.

The index of spending and income shows a growth the last 6 months. An increase in expenditure of 0.6 percent in March was rather normal and we also see that the income rose, but not so fast.

"The key point is that household spending can only be supported if we get better income growth," said Joel Naroff, chief economist at Naroff Economic Advisors, in Holland, Pa.. "This is going to take lasting job gains."

On Friday the Labor Department releases the April employment report and Naroff said he expects to see a slight gain in jobs. On the other side he said that much of those gains might come from companies that are infilling jobs, which should have been filled during the last six months. They may look stronger than in reality.

The whole process of spending more and more is good to recover the economy but Naroff said this trend couldn’t be sustained.

"Since income growth fell short of the shopping spree so, to pay for everything people had to use up some of their savings," Naroff said. "That led to another decline in the savings rate."

A negative point is that despite of the increased spending, the normal consumer ‘s confidence remains very low! This can also evolve with the expected rise in unemployment.

Nowadays, the prices of products have gone up (2 percent) while people buy the same. If we look at the energy and food costs, we see a staggering increase of 18.7 percent since March 2009. While many other prices remain stable, food and energy make up large portions of the typical consumers' budget, which explains the increase in expenditure.

It’s really a worldwide problem and another result of the crisis. I think that the negative points will eventually overtake the positive points. The economy needs to recover over and over again. I hope that we will have some reserve within a few months. And we all see that the price of some products is absolutely exaggerated. Let’s hope this factor will restore itself.

By Karen Mechelinck-2 FV 4

Source: http://www.consumeraffairs.com/news04/2010/05/consumer-spending.html

Australia is to become the First country to ban branding and logos on tobacco products.

Tobacco companies would be required to use logo-free, pure (without text or colourful images) cigarettes packaging. The Australia’s government thinks that it will be then less drawing.

The plans will start off on 1 July 2012. The government wants to take place on the packets with a health warning. The brand name will be put back to the bottom.

The government also wants to lift the cigarette tax by 25%.

The prime minister knows that the cigarette companies will hate it and he’s right! They’ll take it Legal action. The reason why they take it to court is because the users won’t see the difference between the brands anymore.

Retailers said that the raise of the tax will damage the economy and that there will be a lot of people who will sell cigarettes on the black market.

Mick Daly, the chairman of the Australian supermarket chain IGA said that it’s just because the government needs to do something good for the persons health. They don’t think to much about the consequences.

The tobacco companies can demand a compensation for the changes. This will be payed with the money of the taxpayers.

I think it’s not a good idea. The change of the packaging won’t make a difference. It will be less attractive but when you smoke you don’t look a lot after the packet. Maybe it will hold people who wants to smoke.

The tobacco industries are accurate about the fact that they ask a compensation because the governement captured the property rights. I think there aren’t a lot of countries who will folow this case.

Written by: Sofie lamon

Source: http://www.guardian.co.uk/world/2010/apr/29/austra.0lia-ban-branding-cigarette-packets

Volcanic eruption: what are the rights of the consumer?

The news about the Icelandic volcano eruption came unexpectedly. All over the world, especially in Europe, flights were cancelled because of the potentially dangerous ash cloud. Thousands of travelers got stuck in the airports.

Were you one of them? And you want to know what your rights are? Then read this summary below carefully.

• Airlines will refund or rebook your flight. They also have the duty to pay your hotel and provide you with food and drink(s).
• Some of the travel insurances cover the costs, others don’t because this is a natural disaster. It depends on what is written in their policy. It is recommended to contact your insurer to find out if you are covered or not.
• These are circumstances beyond one’s control. It isn’t the employer’s or the employee’s fault. If you aren’t able to get to work, the employee may take extra paid vacation or unpaid leave.

For more detailed information:

http://www.which.co.uk/news/2010/04/iceland-volcano-what-are-your-rights-211663?src=rss156452

I recognized the situation of the stranded people immediately. Two years ago my boyfriend and I went to London. At that time there was a fire in the Eurotunnel and we couldn’t go home. No one of the employees of Eurostar was able to give us the right information about when and how we could return. We decided to make the best of it and searched a hostel and a way to return which wasn’t evident. Finally we stayed two extra nights and we returned by bus (Eurolines) and ferry.

After this adventure we sent a registered letter to Eurostar. Unexpectedly they repaid the extra nights and the Eurolines and Eurostar return tickets! They also offered us two one-way tickets from Brussels to London.

I hope that the stranded travelers will be as lucky as we were!

By Liesbeth Alliet

U.S. consumer spending on electronics rises

This week, the purchase data of April are released and you can notice some remarkable facts, It seems that U.S. consumers bought more electronic goods on the net compared with the same period last year. They also spend more on major appliances and status goods but less on clothing and footwear.

The mixed results were caused by four reasons. The first two had a positive influence on the sales and the other two weren't that good for the sales.

The first reason was the rainy weather in April. People wouldn't go to a shop because of the bad weather. They bought it on the net.
The second was the rise of consumers' confidence. People spend more because they aren't suspicious anymore.

The third reason was the volcano in Iceland. Many people weren't home because they were stuck at the airport. They couldn't buy stuff.
The fourth reason was the early Easter. People bought more good in March and less in April.

Another conclusion is the fact that net sales are doing well. Even more, it's the ninth month in a row that people bought more online.The other means of payment didn't have good results.

I have the impression that net sales are doing very well. This is due to the fact that people didn't have much time, they have to work constantly. If an enterprise has an online shop, people will use this instead of going to a shop. I also use this and I didn't have any complains.

To conclude: The economy is recovering. People buy more because they trust the economy again. But it's not enough. There are still some people which are unemployed. Economy is on the ride track again.

written by yorick stroobant

my source: http://www.cbc.ca/consumer/story/2010/05/05/con-us-retail.html

EU to lift liquid ban on airplanes in 2013

From April 2013 Europe’s air passengers will be able to take water bottles, sprays and gels on board. This will be the end for the current restrictions on liquids in cabin baggage. In all EU airports there will be installed a new technology that is capable of detecting liquid explosives.

Only drinks, gels, pastes, lotions and sprays in bottles of less than 100 ml are currently allowed on planes if they are carried in a clear plastic bag. Other liquids are not allowed. Many travelers are frustrated when they have to throw away contact lenses cleaners of expensive perfumes.

Most of the time rules on purchased items in duty-free shops before boarding are confusing, especially for people who travel in and out Europe.

Next year, passengers will be allowed to take liquids from the duty-free shop in their hand luggage, outside the EU or on board of non EU-airlines. Most liquids are sealed and screened before boarding.

Other envisaged measures are the elimination of double security checkpoint in the EU, simplifying and harmonizing procedures and ensuring common minimum standards of security training for aviation security staff.

Personally I think all the measures are necessary, especially after the attack at Ground Zero. It’s of course frustrating when you need to throw away something of your personal belongings. But with the new rule of 2013 it will be al lot essayer and there will be less misunderstanding.

By Karen Mechelinck – 2 FV 4

Source: http://euobserver.com - 30 April 2010

Should I buy or rent a house?

The question that a lot of consumers are asking in these times of economic crisis is: buy or rent a house?

The answer is not that simple.
Everyone gets told that renting a home is a waste of money and that you are better off buying a home. This is not quite true.

In these times of crisis, a lot of people are losing their homes because they can't pay their mortgage anymore. People are scared of that, they don't want to lose a house. A good option to avoid that is to rent one.

Also, if you like to change from time to time, renting has an advantage. If you don't like your current house anymore, you can just wait till the lease expires and move out. This is a lot harder when you bought a house.

These three tips can help you decide whether to buy or to rent a house.

• The 28% cap. Housing shouldn't take in more than 28% of your monthly income.
• Stay for five. If you want to buy a house, you should stay in it for at least 5 years. If you can't do that, you might want to consider renting one.
• Ownership requires work. Bear in mind that if you buy a house, you have to keep it in good condition. Like for example: painting, fixing problems,... . You can also add certain parts to your house, those items are very expensive and can be very time consuming. If you don't want to do those things, you might want to rent a house.

I think renting a house is surely worth a shot, but I rather buy a house.
When you own a house, you can change whatever you want, you can add like a garage or make an extra room. If you rent one, you have to ask permission to the landlord.
If you own a house, you are also pretty sure you can stay there. If you rent one and your landlord wants to do something else with the house, he can just kick you out at the end of the lease.

But I think that the above tips can help you decide whether to buy or to rent a house.

Written by Dieter De Smet

Source: http://www.americanconsumernews.com/2010/04/should-i-rent-or-buy-a-house-3.html (April 27th, 2010)

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Replace your cash and cards with a cell phone.

Every day, you use money and bank cards to pay your daily expenses. But sometimes, you don't have enough cash or you can't find your card back. Two American companies (Venmo and Xipwire) have found a solution for this problem. They made it possible to pay with your cell phone.

How does it work? It isn't difficult. First, you have to register your bank account so Venmo can make a Venmo account. When you go to a shop, you send the amount of payment and also the telephone number of the vendor to Venmo. They send an e-mail to the vendor and he has to accept it before Venmo sends the money.

Xipwire is almost the same. You only have to send a code to the company and they will send a message to the vendor. After this, you have to dial your secret pin code and you've paid for the product. With Xipwire, you also can send money to your friends.

At the moment, both products are free of charge. Next year, you have to pay for a transaction when you're a member of Xipwire.

I believe this is something very special. There was a moment when they tried to use this kind of payment in Belgium. This didn't work because it was too difficult. I would use it if it would come to Belgium.

Conclusion: This is something new. If it works, it will be a huge success. If it won't, it will be another useless attempt to use the cell phone as a mean of payment. We will see what the future brings.

Written by Yorick Stroobant

My source: http://abclocal.go.com/wpvi/story?section=news/consumer&id=7410319