RTT News with details of the latest release:
More important is longer term trends. Broken down below are the components of personal income over the past three years. The broad theme is decreased income, increased savings, yet relatively steady consumption.
With consumers saving more as a result of economic uncertainty, the Commerce Department released a report on Friday showing that personal spending decreased in September, while personal income came in nearly unchanged.
The report showed that personal spending fell by 0.5 percent in September following an upwardly revised 1.4 percent increase in August. The moderate pullback in personal spending came in line with the expectations of economists.
Additionally, the Commerce Department said that personal income decreased by less than 0.1 percent in September after edging up by a revised 0.1 percent in the previous month. Economists had expected income to be unchanged.
Looking closer at the year over year changes in each, we do see a paradigm shift between consumption and savings (personal consumption down, personal savings up - though reader MAB points out total savings is WAY down due to the debt load taken out by the government), which has been partially eased by reduced taxes allowing consumers to spend more on the margin over the past year.
This is inclusive of the pulling of demand from the future into the latest quarter (i.e. consumption "should" have been much less) due to the cash for clunkers program.
The question is what happens now? More on that in a bit.