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