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Income Growth Is Weak, So Americans Reduce Their Savings To Keep On Spending

souvenir shop credit cards wallet shopping Income Growth Is Weak, So Americans Reduce Their Savings To Keep On Spending

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At first blush, today’s personal income and spending news looks like kind of a snooze.

But actually it’s not good.

Personal income rose by just 0.1% vs. expectations of a 0.2% rise.

And last month’s personal income number rose by only 0.1% vs. original estimates of 0.3%, so that’s a downward move of some significance.

Spending held up, rising 0.5%, but that’s going to be tough to maintain if earnings keep falling.

Of course, the above data means that what’s happening is savings rate.

From the announcement:

Personal saving — DPI less personal outlays — was $444.8 billion in August, compared with $492.2 billion in July.  Personal saving as a percentage of disposable personal income was 3.7 percent in August, compared with 4.1 percent in July.

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ORIGINAL POST: First big datapoint of the day: Personal Income Spending for August.

Analysts expect growth of 0.2% on income and 0.5% on spending.

We’ll have the number here LIVE at 8:30 AM ET.


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