From the BEA:
News Release: Personal Income and Outlays
Personal income increased $31.5 billion, or 0.3 percent, and disposable personal income (DPI)increased $21.7 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $13.1 billion, or 0.1 percent. In January, personal income increased $77.1 billion, or 0.7 percent, DPI increased $53.5 billion, or 0.6 percent,and PCE increased $72.1 billion, or 0.8 percent, based on revised estimates.
Personal saving — DPI less personal outlays — was a negative $43.8 billion in February,compared with a negative $51.0 billion in January. Personal saving as a percentage of disposable personal income was a negative 0.5 percent in February, the same as in January. Negative personalsaving reflects personal outlays that exceed disposable personal income. Saving from currentincome may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or byusing savings from previous periods. For more information, see the FAQs on “Personal Saving” on BEA’s Web site.
U.S. February Personal Spending Rises 0.1%; Incomes Up 0.3%
Consumer spending rose 0.1 percent in February, the smallest gain since August, as Americans took a breather after splurging a month earlier. A measure of prices favored by Federal Reserve policy makers rose 0.1 percent, as expected.
The increase followed a revised 0.8 percent spending gain in January that was the biggest in six months, the Commerce Department reported today in Washington. Incomes rose 0.3 percent after a 0.7 increase the previous month.
Rising incomes and more jobs are shoring up consumer confidence, which will help spending in coming months, economists said. A healthy consumer and revised figures showing inflation jumped last quarter may keep the pressure on the Fed to raise its main interest rate at least one more time.
The savings rate, which measures the difference between income and spending, held at a minus 0.5 percent for a second month. The rate has been negative for nine of the last 11 months. A negative rate suggests consumers are dipping into savings to maintain spending.
Funny how personal spending is only up a little over 1% on an annualized basis, yet the governors “austere” budget includes a 9% spending increase. Is the govt the only entity that never needs to tighten its belt?
Off topic, but I just wanted to let everyone know that I received a call from a realtor the other night asking if I was interested in a house that we attended as an open house…. eight weeks ago. She said that the sellers were desperate. :0
I laughed (but in a respectful kind of way) and told the Realtor that if they would accept a bid at 75% of the asking, I’d be interested; otherwise, no.
I am curious as to the broker’s reaction about the 75% offer?
The housing ATM and slower house pricing gains in the future should keep the consumer afloat for the time being. …the consumer needs to spend spend spend to keep the economy going.
What a bunch of BULL!
Consumers have been brainwashed into believing they are well off and that sopending is good. HA!
GOOD work gary.
Expect more realtor harassment in the next 12-36 months.
75% how about 60%!
anonymous @ 8:57,
Aren’t the states required by law to have a balanced budget? This is in contrast to the federal govt, where they can run a deficit ad infinitum.
The federal “tax cut” for the top earners results in less federal money for the states, which forces the states to increase their revenue through sales and income taxes.
Of course, this trickles down to the individual communities, who get less funding from the state because the state has its own troubles. The communities are forced to increase their revenue by raising property taxes. It’s got to come from somewhere.
There is no such thing as a free lunch.
The current administration and congress have a lot of nerve calling themselves Republicans. Fiscal responsibility, yeah right!
The realtor said in a kind of matter of fact way that she didn’t think the sellers would go for the offer and I said thank you for calling and we hung up.
During my first year of home-ownership, I managed to save NOTHING. I had to dip into savings every month to pay my bills.
It was our (my wife & I) first home and since we practically came from living at home, we had nothing in the way of furniture, home goods, home supplies, cleaning supplies (you’d be amazed how much you need), etc.
I finally pulled back into the green starting this year, but I already see a couple of negative months with a baby on the way and landscaping that needs to get done!
“During my first year of home-ownership, I managed to save NOTHING. I had to dip into savings every month to pay my bills.”
Just curious, was this a surprise or an expected scenario? Had you run some monthly budget numbers in a spreadsheet before buying the home?
Not judging, just asking.
Kids are expensive. Diapers alone run around $1500 a year. You might want to do that landscaping yourself.
I can relate to you. Though, we (my wife and I) are lucky that her father is a contractor and he helped us fixing the house (other wise we would have to spend additional $30K-$40K). The furniture alone came close to $10K. Wait when the baby is born – hospital, diapers, formulas…etc – it all adds up. Plus we needed a “new” car for my wife – thank God we know a car dealer that goes to auto-auctions and we got nice Nissan Murano (2005) for $20K. We both contribute to 401K but are able to save only about $1K a month. It’s getting better though. There’s a hope.