Gov't Report: Food Stamps Participation at Historic High, Even as Unemployment Rate Falls
11:00 AM, FEB 20, 2014 • BY JERYL BIER
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A recently released Department of Agriculture (USDA) report on the "Food Assistance Landscape" for the fiscal year 2013 shows that for the second year in a row, participation in the federal government's SNAP (food stamps) program has increased despite a corresponding drop in the unemployment rate, bucking the historical trend. The unemployment rate fell below 8 percent in 2013. On the other hand, the percentage of the U.S. population on food stamps in 2013 rose to the highest level ever, just over 15 percent at 47,600,000 persons. The orange and blue lines on the right side of the chart below demonstrate the divergence:
The author of the report, Victor Oliveira of the USDA's Economic Research Service, describes the anomaly in the recent trend:
The percentage of the population in SNAP increased in both fiscal 2012 and 2013, even as the unemployment rate fell for the third consecutive calendar year—a result inconsistent with the historic rela- tionship between the two variables. The improvement of economic conditions during the early stage of recovery, when the unemployment rate starts to fall, takes longer to be felt by lower educated, low- wage workers who are receiving SNAP benefits. For example, the poverty rate in 2012 (the latest year available) was about the same as during the 2 previous years, suggesting that while unemployment was falling, many low-income households did not share in the economic growth. During previous economic recessions, the unemployment rate fell before SNAP participation decreased (a lagged response). It is possible that as the economy continues to recover, SNAP participation will follow but with a longer lag than following previous recessions.
Other areas explored in the report are the continued reduction in participation in the Women, Infants, and Children (WIC) program, and the increasing expenditures in the National School Lunch Program despite falling participation. The report notes that food and nutrition assistance expenditures continue to drive the growth in the USDA's budget, now accounting for 72% of USDA outlays.
Wal-Mart forecast disappoints as grocery business struggles
The Walmart logo is pictured at its store in the Porter Ranch section of Los Angeles November 26, 2013.
CREDIT: REUTERS/KEVORK DJANSEZIAN
(Reuters) - The struggles of the low-income U.S. consumer are playing out in Wal-Mart Stores Inc's grocery aisles.
The world's largest retailer, which gets more than half its sales from groceries, on Thursday gave a disappointing full-year forecast. It blamed sharp cuts in food stamp benefits and higher payroll taxes that are will hit disposable income for its core customers. Wal-Mart shares fell 2.2 percent in morning trading.
To combat sluggish sales, broaden its customer base and fend off aggressive rivals, Wal-Mart said it was doubling the number of smaller new stores it originally planned to open this year.
Wal-Mart's U.S. comparable sales, e-commerce and sales at stores open at least a year, fell for the fourth quarter in a row, slammed by a drop in its grocery business and aggressive price cuts during a tough holiday shopping season.
The smaller stores, typically one quarter the size of Wal-Mart's supercenters, allow the retailer to reach new customers, particularly in urban areas. They also appeal to shoppers who want to pick up groceries and other staples mid-week without making a trip to an enormous supercenter.
"The smaller format is a way to address the problems at grocery, but it's going to take multiple years for it to have a positive impact on overall results," said Edward Jones analyst Brian Yarbrough.
Comparable sales at the smaller stores rose 5 percent last quarter, compared to an overall 0.4 percent drop in the United States.
Wal-Mart now plans to open between 270 and 300 small stores this fiscal year, in addition to the 346 currently in operation, and is spending an extra $600 million to do so. It had planned to open 120 to 150 new small stores this year. Wal-Mart operates 4,000 super-centers.
Expansion of Wal-Mart's e-commerce will also eat into this year's profits.
The company expects net sales growth this year to come in at the low end of its forecast range of 3 to 5 percent.
The cuts last year to benefits under the Supplemental Nutrition Assistance Program, the largest U.S. anti-hunger program, have been particularly painful for Wal-Mart. One in five Wal-Mart shoppers relies on food stamps, according to Cowen analyst Tal Lev. Wal-Mart also faces stiff competition from dollar stores for lower-income shoppers.
During the quarter, comparable grocery sales fell by a "low-single-digit" percentage. In contrast, higher-end supermarket operators Kroger Co and Safeway Inc reported increases for their most recent quarters.
Wal-Mart shares fell 2.2 percent to $73.21 in morning trading on the New York Stock Exchange.
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The retailer plans to increase its spending on integrating its stores with e-commerce, saying efforts such as using stores to fill online orders during the holiday season had been successful.
E-commerce sales crossed the $10 billion threshold last fiscal year and the company is fighting Amazon.com Inc to win online shoppers.
Investment in both the small stores and e-commerce will hit profit, and the Wal-Mart said it expects earnings of $5.10 to $5.45 per share this year. Analysts expect about $5.54 a share, according to Thomson Reuters I/B/E/S.
Overall revenue in the quarter through January 31, which included the key holiday season, grew 1.4 percent to $129.7 billion.
Wal-Mart Chief Executive Doug McMillon, who took the reins this month, said the company would use "price investment," company-speak for lower pricing, to revive U.S. sales.
At its Sam's Club chain, comparable sales fell 0.1 percent, while rival Costco Wholesale Corp posted gains.
Overseas, comparable sales fell in key markets such as Canada and Britain.
The company earned $1.60 per share excluding items, down from $1.67 a year earlier, but one cent better than expected.
Record 20% of Households on Food Stamps in 2013
January 21, 2014 - 4:34 PM
(AP Image)
(CNSNews.com) -- A record 20% of American households, one in five, were on food stamps in 2013, according to data from the U.S. Department of Agriculture (USDA).
The numbers also show there was a record number of individuals on food stamps in 2013 and that the cost of the program, the Supplemental Nutrition Assistance Program (SNAP), was at an all-time high.
The USDA says that there were 23,052,388 households on food stamps in the average month of fiscal 2013, an increase of 722,675 from fiscal year 2012, when there were 22,329,713 households on food stamps in the average month.
Those numbers were compared with the Census Bureau’s estimates for the total number of U.S. households in the last month (September) of each fiscal year to determine the percentage of all U.S. households in that fiscal year that were on food stamps.
In 2013, according to the Census Bureau, there were 115,013,000 households, which means the that the households on food stamps--23,052,388 households--equaled 20.0% of all households.
In the past five years alone, the number of households on food stamps has greatly increased. In fiscal year 2009 – Oct. 1, 2008 through Sept. 30, 2009 -- the number of households on food stamps was 15,232,115. Five years later, in 2013, that amount had increased by 51.3% to reach 23,052,388 households.
Not only have households seen a major increase in food stamps’ participation, but so have individuals.
In 2013, the monthly average for individuals on food stamps hit an all-time-high of 47,636,084, according to the USDA, an increase of 1,027,012 over the 46,609,072 individuals who were participating in the program in 2012.
That number has dramatically increased from five years ago. In fiscal year 2009, the number of individuals participating in the food stamp program was 33,489,975. In 2013, the number was 47,636,084, an increase of 42.2%.
Furthermore, the cost of food stamps, the Supplemental Nutrition Assistance Program (SNAP), has reached an all-time high.
For fiscal year 2013, the SNAP program cost $79,641,880,000, which is a 164% increase over the past decade. When adjusted for inflation, the cost of the SNAP program was $30,153,090,000 in fiscal year 2003.
During the last five years, the SNAP program grew by 36.8%, from $58,223,790,000 in 2009 to $79,641,880,000 in 2013.
This is an indication of financial issues problem and world economic. It is just so sad that even for military who served years for public.
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