Consumer Spending, Personal Income Increase
The Commerce Department says spending rose 0.3 percent in May
U.S. consumers slightly increased their spending last month, and economists said the rise was largely driven by the economic stimulus package that boosted the income of Americans.
The Commerce Department reported today that consumer spending rose 0.3 percent in May, compared with the month before. It's the first gain in spending since February and another possible sign that efforts to ease the recession could be paying off. Taking inflation into account, however, the spending rate rose by only 0.2 percent.
The increase is in line with a 1.4 percent jump in personal income, the strongest gain in a year, the department said. The $787 billion stimulus package, which includes expanded unemployment benefits and lower personal taxes, was largely responsible for the higher consumer spending.
But not all Americans are spending the stimulus money. Personal saving as a percentage of disposable income increased to 6.9 percent, the highest level since December 1993. The personal saving level jumped to a record annual rate of $768.8 billion, the highest since records began in 1959.
Meanwhile, economists continue to keep a close eye on the inflation rate amid massive government spending designed to pull the economy out of recession.
Reader Comments
Consumer spending has risen, yes?
An economy driven by comsumption, in time, is as good as termites are to a wooden structure. The present evidence is its testimonial. Yes, the consumption fueled by living beyond individuals daily means with credit cards fully loaded beyond capacity.
Yes, our very Federal Government now in debt over 100 trillion dollars on top of it! While George Washington left these wise words: "No pecuniary consideration is more urgent than the regular redemption and dicharge of the public debt: on none can delay be more injurious or an economy of time more valuable".
Thomas Jeferson left these wise words also: "The principle of spending money to be paid by posterity, in the name of funding, is but swindling futurity on a large scale".
Question: Why has the business of Personal Storages spread all over America? Yes, stuff bought on credity mostly stored never tuly be used, or what? But now happiness because consumption has risen, to add insult to injury? What else?
Stimulus package was a joke
This has not helped the working class people at all. For me, it roughly gives me around a $13 p/week more----I can't even say more, because of the taxes. I don't see a difference! The gas prices are killing the working class people! If you want the economy to get out or recession--regulate the gas prices and food prices!! They both are rediculous!!
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