Rising costs swallow stimulus checks

Wednesday, August 20, 2008 at 1:57am

Rising fuel and food prices have erased the impact of the $92 billion in government stimulus checks distributed so far, according to Franklin-based research firm IHL Group.

According to IHL Group, fuel and food prices have risen by $132.4 billion over the past year, and consumers are putting the stimulus money toward debt reduction and basic needs instead of big screen TVs and chai lattes.

Despite a recent drop, fuel prices have been particularly painful for retailers, casual restaurants and auto dealers.

"Every sustained one-cent increase in fuel prices takes $1.7 billion a year out of U.S. consumers’ pockets," said Greg Buzek, president of IHL Group. "Sales lost to the retail economy in the past year due to a sustained rise in gas prices equates to the combined annual revenues for Kroger and Target."

However, the recent dip in fuel prices could revive the wilting retail market. Buzek said the lower fuel prices will release $3.4 billion that consumers can spend elsewhere, and the timing couldn’t be better — the much-needed shot in the arm coincides with the crucial back-to-school shopping season.

"Those retailers that have adjusted their inventories and coordinated their marketing accordingly are best positioned to benefit,” said Buzek.

Filed under: City Business
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By: WickedTribe on 12/31/69 at 6:00

The grocery store prices are particularly crazy. People don't mention them as often as gas prices, but buying fruits and vegetables is almost impossible now.I need to quit being lazy and get out to the farmers market to see if I can find a break there.

By: NancyJones on 12/31/69 at 6:00

Yes the rebate check is not cutting it with the prices of everthing going up. Being non-tech savvy even I have started shopping through bargains websites like Unodeals, Bizrte to stretch my rebate check as far as possible.

By: Dragon on 12/31/69 at 6:00

"...consumers are putting the stimulus money toward debt reduction and basic needs instead of big screen TVs and chai lattes."Sounds like reasonable and responsible consumerism. Dave Ramsey would be proud.

By: idgaf on 12/31/69 at 6:00

The rebates were a bandage on a hemorage and a waste of money.We need to harvest the resources we have.

By: NewYorker1 on 12/31/69 at 6:00

I'm glad the rebate checks didn't do what the government wanted it to do, because I didn't get one and I pay taxes just like everybody else.

By: revo-lou on 12/31/69 at 6:00

Yeah, id, where is that money tree?

By: Dragon on 12/31/69 at 6:00

I'm curious NY1, why did you not qualify? Income too high? Claimed as a dependant?

By: WickedTribe on 12/31/69 at 6:00

I got my rebate check and spent it on a vacation in the good ol' USA (Chicago to be exact) so I guess I spent it as intended.

By: NewYorker1 on 12/31/69 at 6:00

I do make a six figure salary and single with no kids, but I pay taxes just like everybody that received a rebate check. My point is, they should give one to everybody that pays taxes and not just a few.

By: revo-lou on 12/31/69 at 6:00

Hey NY1, sorry you don’t get any money back, but let me be the first to say thanks for doing all that you do so that I could get a check!

By: WickedTribe on 12/31/69 at 6:00

Now we can add a 20% increase on the electric bill to these rising prices.

By: Dragon on 12/31/69 at 6:00

NY1 - welcome to liberal government. They did not repeat the mistake of calling this a rebate check, but a stimulus check. It was determined that you did not "need" the check.Obama wants to give everyone (who needs it) a $1,000 check if allowed to increase taxes on "big oil". Doubtful you would see this one either.

By: gdiafante on 12/31/69 at 6:00

"It's obvious our economy is in a slowdown. Fortunately, we recognized the signs early and took action. I signed an economic growth package that will provide tax rebates to millions of American families and workers to boost consumer spending."- President George W. Bush, April 2008"“Clearly, we have much ahead of us to do, Mr. President, and the American public is counting on us to fulfill the jobs that they sent us here to do. I, for one, have heard the voters. They want us to work together to stimulate and strengthen our economy and promote our nation’s long term economic growth. Let’s finally pass the economic stimulus plan and send it to the President. After all, time is of the essence if this effort is to be successful. The American public is waiting.” - Senator John McCain, 2/7/08That's right NY1, if you want Liberal government, vote McCain.

By: NewYorker1 on 12/31/69 at 6:00

It's not fair. It ticks me off to no end knowing that the government that I contribute to doesn't do crap for me.