Financial Times says that some 40 per cent of US families now on food stamps have “earned income”, up from 25 per cent two years ago.

The agriculture department, which runs the programme, attributes this rise to workers having their hours cut back.

The average working week is now about 33 hours, the lowest on record, while the number forced to work part-time because they cannot find full-time work has risen more than 50 per cent in the past year to a record 8.8m. Wages and benefits have decelerated.

The food stamp data suggest that “the labour market problems are more significant than you would expect, given just the unemployment rate”, said John Silvia, chief economist at Wells Fargo. “For me it suggests the consumer is not going to rebound or contribute to economic growth for the next year, as the consumer would in a traditional economic recovery.”

Kevin Concannon, undersecretary for food, nutrition and consumer services at the agriculture department, called the increased enrolment of working families “very significant”.

Do we really think that US consumer is going to come back anytime soon ???

Providers of consumer goods and services and retailers are definitely feeling the pinch.

In the long-run this is healthy but if we acknowledge that the primary investment savings and wealth creating vehicle for most Americans is their home and consider that the National Association of Realtors (NAR) estimates that from the peak of 2007 thru January 2009 the median home price has declined aprox.-25% and that the stock market, S&P 500 -45% since the October 2007 peak-to-date, then a lot of people have some serious bootstrap catching up to do.

Anyone who has experienced any of this wealth destruction is more inclined to rebuild wealth instead of spending hard earned cash. For those who refuse to modify spending and saving habits and use credit, it will be difficult to find.