Consumer spending fails to keep pace with increasing incomes

United States financial numbers for May 2010 are in, and according to Bloomberg Business, individual incomes outpaced consumer spending quite a bit. This reportedly made it much a lot more possible for households to boost all of their savings and support the economic recovery, although how slower spending boosts the nation’s economic recovery is in question. It could possibly be viewed as another instance of reporting sleight of hand, which is similar to the way U.S. unemployment numbers were being reported for the past few months.

Source for this article: Consumer spending fails to keep pace with increasing incomes by Personal Money Store

Consumer spending – Where the money needs to go

Reports indicate that the table is gradually being set for increases in consumer spending. Salaries are trending upward, payroll numbers are up, and Americans are working longer. Then again, Bloomberg reports in an additional story that the large number of jobless in The US really lowers salaries as there are so numerous applicants (supply and demand), so possibly one hand doesn’t know what the other is doing in Michael Bloomberg’s domain. Whatever the case, the Federal Reserve has kept interest rates steady, so fewer folks can have to dive to the nearest cheap personal loan bunker to make ends meet.

The consumer spending isn't going to propel recovery

However, as RBS Securities economist Omar Sharif (not the bridge-playing actor) told Bloomberg, the level of consumer spending should be enough for sustained growth, but not enough to drive recovery efforts. Yet despite underwhelming growth in consumer spending, numbers still beat the median estimate of 61 economists surveyed by Bloomberg (.1 percent gain). Wages were up .5 percent (1.3 percent given that March), which was the largest increase over three months since December 2007 when the current recession is believed to have started, and individuals looked to the easy payday loans a lot more often than before. As a result, savings increased significantly: 4 percent from April into May ($ 454.3 billion). That’s the highest such increase in a single month given that September 2009, Bloomberg reports.

For the most part, it is good news

According to Sal Guatieri, American consumers have effectively rolled with the punches. ”As long as jobs are coming back, people will continue to spend,” he explained to Bloomberg. Paying down debt such as from a fast personal cash loan and rebuilding savings are really great financial goals that will continue to see many improvement as optimistic economic factors continue to emerge.

A lot more information about this topic at these websites:

Bloomberg Business

businessweek.com/news/2010-06-28/u-s-economy-income-gains-boost-spending-savings.html

Bloomberg (lower salaries)

bloomberg.com/news/2010-06-27/jobless-produce-u-s-investor-profits-on-productivity-with-less-inflation.html

Consumer spending from the Fox Business point of view:

youtube.com/watch?v=xmK9gC2nW0Y