A Bit of a Disconnect in Minor Economic News Stories of the Week?

Two news items from the past week caught my eye as being somewhat inconsistent with one another.

First, we have a wire service story on increasing pressure on the lower rungs of the economy:

Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It’s starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.[...]

From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.

Her husband’s check from his job at a grocery store used to last four days. “Now, it lasts only two,” she said.

To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there’s enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends more than ever on the bags of free vegetables and powdered milk from a local food pantry.[...]

Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.

Meanwhile the Social Security administration has announced the cost of living adjustments for Social Security checks for 2008. Via the Indianapolis Star:

With essentials such as food, gasoline and medical care rising at a faster clip, an extra $24 a month likely won’t go very far. But that is the boost the typical retiree will see in Social Security checks come January.

The 2.3 percent cost-of-living adjustment is the smallest in four years, even though many prices are rising more quickly this year.

Admittedly, the COLA calculation can be blamed on some of the arcana surrounding the SSA’s magic formula…but still, doesn’t the conjunction of the two news stories seem just a little…bad?