This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Breakfast Is the Most Important Meal of the Day -- to the U.S. Economy

NEW YORK ( TheStreet) -- In the first week or so in January, Americans got an unwelcome surprise in their paycheck -- a 2% hike in the payroll tax as the temporary cut in payroll taxes ended Dec. 31.

The two-year suspension was meant to boost the economy and put more cash in consumers' pockets. With the tax break is in the rearview mirror, its elimination just may be curbing Americans spending habits and hurting the economy.

So says SymphonyIRI, a Chicago-based consumer services company.

In a white paper released Monday, SymphonyIRI notes that a U.S. family with household income of $40,000 loses $800 with the elimination of the payroll tax break, which could manifest itself in small, but measurable ways.

You may be surprised to hear one of SymphonyIRI's key warning signs: breakfast.

"Out-of-home consumption will likely drop, and specifically out-of-home breakfast categories," says Krishnakumar S. Davey, managing director at Symphony Consulting, a division of SymphonyIRI. "Consumers usually eliminate the out-of-home breakfast meal first when they cut spending."

A drop in income can also turn many families away from mass merchandise stores (at the mall or online) and turn them toward bargain outlets such as the Dollar Tree.

Not for nothing, but the Dollar Tree's (DLTR - Get Report) stock price has risen from $38 per share in the first week of January to $41 per-share in the second week of February.

Family Dollar (FDO - Get Report), another bargain outlet, saw its share price fall from $72 per-share to $55 per-share from Dec. 10-31. After the payroll tax break was rescinded, the company's stock price rose to $57 per share in the first five weeks of 2013.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DLTR $81.14 0.00%
FDO $79.38 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs