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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

April personal income up, spending flat

Americans' personal income rose 0.4 percent in April compared with the same period last year, while personal spending was unchanged, meaning that we're earning a little more but not spending it all.

The numbers were largely in line with expectations. April marked the largest increase in personal income since January. The personal spending number was the weakest since September 2009.

The April numbers suggest that American consumers are being more prudent with their personal income. That's a good thing, individually, but it can have short-term detrimental effects in an economy that's 70 percent based on consumer spending.

This recovery, wobbly as it is, has to be based on spending, not new job creation. Unemployment sits stubbornly near 10 percent and looks to remain there for at least the rest of the year. Any recovery we have will be a spending-fueled one, not an employment-fueled one.

In stocks, futures are mixed and point toward a quiet day on Wall Street following yesterday's big rally.

By Frank Ahrens  |  May 28, 2010; 8:43 AM ET
Categories:  Data  
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Next: Stocks have worst May in decades

Comments

"This recovery, wobbly as it is, has to be based on spending..."

Why? Nothing we buy is produced in the US, so how is spending going to help us?

Posted by: expat1 | May 28, 2010 10:15 AM | Report abuse

"This recovery, wobbly as it is, has to be based on spending..."

Why? Nothing we buy is produced in the US, so how is spending going to help us?

Posted by: expat1 | May 28, 2010 10:15 AM | Report abuse

Fitch squeezed Lemon in the meal.
Fitch downgraded Spain to AA+ from AAA
European Stocks closed,but,Wall Street dived after announcement,but,IMO,may recover late in session.

Posted by: halozcel1 | May 28, 2010 1:01 PM | Report abuse

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