Monday, March 1, 2010

Income Stagnant + Consumption Up = Savings Down

RTT News details:

the Commerce Department released a report on Monday showing that personal income increased by less than anticipated in the month of January, the report also showed a bigger than expected increase in personal spending.

The report showed that personal income edged up by 0.1 percent in January following a downwardly revised 0.3 percent increase in December. Economists had expected income to increase by 0.4 percent, matching the growth originally reported for the previous month.

At the same time, the Commerce Department said that personal spending rose by 0.5 percent in January after rising by an upwardly revised 0.3 percent in the previous month. The increase exceeded economist estimates for 0.4 percent growth.

Real personal income is now flat year over year, while real consumption is up. No surprise then that personal savings is once again trending down.

Source: BEA

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