Now that a fill-up costs them $90, Minnie and William Lewis of Baltimore County have given up weekly pleasure drives on scenic routes.
East Baltimore resident Leonard Cochran is buying less meat at the grocery store and eating the wild rabbit and venison he can get free from his hunter friends.
As for Thomas Brown of Baltimore and companion Dorothy Lewis, they're looking for jobs. He's 84; she's 75. "Everything is up," Lewis lamented. "The gas, electric, rent."
This is what happens when consumers feel stretched, pressed and battered by escalating costs as incomes aren't keeping up. Even as the U.S. economy worsens and businesses have begun cutting jobs, the price tag for everyday necessities such as food, heating oil, gas and electricity is spiking. Soaring shipping and commodity costs along with a slumping dollar are pressuring prices of the flood of imported goods that Americans buy.
Thousands of homeowners with adjustable-rate mortgages are paying higher - in some cases sharply higher - monthly payments. And with property values falling, the home-equity tap has been shut off, an end to the ATM many Americans had been turning to as an income supplement - though they must still deal with the debt.
"This is definitely a tough time for consumers," said Scott Hoyt, director of consumer economics at Moody's Economy.com. "Savings - at least as measured by the government - is at a record low. Their ability to borrow to make up for that is lower than it's been ... in a lot of years, due to the reduced availability of credit, due to their near-record-high debt obligations. So consumers sort of don't have a place to turn."
Financial stretching to the breaking point can be seen in the rapidly rising number of mortgage defaults and foreclosures, but that's not the only result. Credit card and auto-loan delinquencies are heading up. So are hardship withdrawals from 401(k) retirement accounts - up 10 percent last year at Baltimore's T. Rowe Price Group Inc., which saw a sharp uptick toward the end of 2007.
`Alarming trend'
Eric Levy, retirement outsourcing business leader for Mercer, a consulting, outsourcing and investment firm, called the nationwide raiding of retirement plans "an alarming trend." With taxes and - in some cases - penalties to pay, it's the "account of last resort," he said.
"You're essentially taking money from yourself," said Stuart Ritter, a certified financial planner with T. Rowe Price.
