Which leads us to this morning's personal consumption and expenditure report. To the NY Times:While 63% of Americans said they were concerned about the overall state of financial markets in 2009, just 45% said they were concerned in 2010.
Nervousness and fear about retirement dropped from 55% who were nervous or afraid last year to just 40% this year. American's concern about having enough money to retire has fallen from 56% in 2009 to 51% this year, the same as in early 2008, the study found.
“Americans appear more relaxed about retirement and are far less worried about their finances overall,” said Craig Hogan, Scottrade’s director of customer intelligence. “The number of people who reported being concerned about issues such as day-to-day expenses, education costs, paying off credit cards, and saving for big ticket purchases didn’t just decline – each category hit a four-year low.”
U.S. consumer spending rose as expected in February for a fifth straight month, while stagnant incomes pushed savings to their lowest level since October 2008, a government report showed on Monday.
The Commerce Department said spending increased 0.3 percent after rising by a slightly downwardly revised 0.4 percent in January. Consumer spending in January was previously reported to have increased 0.5 percent.
Source: BEA
The consumer: archetype of the expression, "Smart like a sack of hammers."
ReplyDeleteIs there any way to determine if some consumer spending is coming from savings of the underground economy?
ReplyDeleteSome habits are hard to break. Where is this money coming from with UE so high and wages going lower?
ReplyDeletetransfer payments (i.e. unemployment / tax credits / bailouts), lack of mortgage payments (good link to that from a reader a few posts back), easy money reducing savings levels, underground economy (referenced by antonw above, but some think a lot less people are unemployed, thus collecting unemployment and still earning money under the table)
ReplyDeleteJake,
ReplyDeleteI linked this post tonight and did not pull a Business Insider job; I gave you full credit with linkage!
I just do not think those avenues of money are the main driver. I am missing something and I will have to think about it.
There are lots of reasons the personal saving number isn't that useful: you really should consolidate the business and government sectors, and maybe add capital gains to income. To name just one: lower tax revenue raises personal saving but lowers government saving. What we've seen over the last year is a continued drop in total saving, which the personal saving number misses altogether.
ReplyDelete