Cheap Life Insurance :Is US economy a Plutonomy?
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Is US economy a plutonomy? Some report state that America may have become a plutonomy because of capitalism wealthy as well as an economic analyst that USA relies too much on spending by the wealthy. Not everyone believes that high oil prices, or the aftermath of Hurricane Katrina, will have a significant impact on the U.S. economy. So what does “plutonomy” mean? A plutonomy is a type of economic growth powered and consumed by the wealthiest upper class of society.
U.S. is considered as in day of a “plutonomy” according to Global strategist at Citigroup an economy powered by the wealthy. Whilst the average consumer devotes 7.8 percent of their total expenditure to energy-related products, high-earners devote just 6 percent. They account for the bulk of consumption and are relatively unscathed by high oil prices.
Jim Paulsen, chief investment strategist at Wells Capital Management, is also sanguine. “Unless crude oil prices rise further from here, the national economy and financial market fallout from this event will diminish. The consumer sector appears about as strong as it has in the entire recovery; real labor compensation is growing at a strong 6 percent, household jobs have risen at an average monthly pace of 287,000 through August, retail sales have been strong, consumer confidence measures are OK, housing and auto sales remain high and household net worth is at all-time record highs.”
Regardless of US economy is plutonomy or not, Market reaction so far seems to suggest that equity investors have accepted the views of the optimists while bond and currency investors have inclined to the pessimistic camp. The belief that the Federal Reserve will stop raising rates has prompted falls in bond yields and in the dollar, which may lose some of its allure to income-seeking investors.
Source: The U.S. plutonomy
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