May income, spending and personal savings all rise
May personal income rose 0.4 percent and consumer spending rose 0.2 percent, numbers that came in line with expectations and that suggest the recovery creeps forward.
Also, the May personal savings rate was 4 percent, the highest figure since September 2009. This means that wary Americans are socking away more of what they make instead of buying a second, third or fourth flat-screen TV.
Forecasters expected both personal income and spending to increase slightly in May.
Both figures are key to the wobbly U.S. economic recovery. The U.S. economy is about 70 percent based on consumer spending. With unemployment still near 10 percent, this is so far a jobless recovery. Any recovery will have to be a spending recovery. If consumers begin to spend less and save more, that will be personally good for them but could harm the larger economy.
The June unemployment figure is released this Friday, and most trading activity this week on Wall Street is geared toward that number -- everyone wants to see whether the private sector can create jobs. The May jobs report showed a big surge in job creation, but it came almost entirely from temporary government jobs created for the census, which will go away when the count ends in the fall.
Spending was flat in April, so the May number represents a slight uptick. But the personal income number in May represented a slight decline from the April growth.
June 28, 2010; 9:05 AM ET
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Posted by: jmounday | June 28, 2010 9:46 AM | Report abuse
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