Secret Site Map
Tuesday, September 02, 2014

Home News Consumer Spending Up Sharply, But Incomes Lag

Consumer Spending Up Sharply, But Incomes Lag

Business

A slight rise in incomes added to concerns that the recovery could weaken unless income growth increases more rapidly.

Associated Press | May 4, 2010

Consumer spending rose in March by the largest amount in five months but the gains were financed out of savings, which fell to the lowest level in 18 months. A slight rise in incomes added to concerns that the recovery could weaken unless income growth increases more rapidly.
 
The Commerce Department said consumer spending rose 0.6 percent in March, matching economists' expectations. Personal incomes edged up just 0.3 percent, raising new worries about lackluster income growth.
 
The March surge in spending was propelled by savings, which drove the personal savings rate down to 2.7 percent of after-tax incomes, the lowest level since September 2008.
 
The fear is that income growth will remain weak, reflecting severely high unemployment, as the job market continues to show the effects of the nation's worst recession since the Great Depression.
 
Unless businesses boost hiring, households will not have the incomes needed to support consumer spending, which accounts for 70 percent of economic activity. That would put the economic recovery in jeopardy.
 
The government reported Friday that the broadest measure of economic activity, the gross domestic product, grew at an annual rate of 3.2 percent in the January-March period. That marked the third quarterly increase since last summer. Most economists believe the recession, which began in December 2007, probably ended in either June or July or last year.
 
The healthy first quarter GDP gain was driven by a big rebound in consumer spending, which powered ahead at an annual rate of 3.6 percent, the best showing in three years. But economists said spending gains of that size cannot be maintained without greater income growth.
 
Read the full story here
 
Source: Associated Press

Top news

Bill That Would Impact Neonicotinoid Use in California on Governor's Desk

AB 1789, which would create a timeline for the Department of Pesticide Regulation to complete its current reevaluation of neonicotinoids, has passed the legislature and is now awaiting the governor's signature.

Massey Services Acquires Austin-Based Green Pest Services

The joining of the two companies further expands Massey Services’ residential pest prevention services footprint throughout Texas.

Arrow Exterminators Accepts the ALS Ice Bucket Challenge

The company joins the fight to beat ALS with donation to ALS association.

Reminder: PCT’s M&A Virtual Event 3.0 is Tomorrow

The half-day conference provides expert advice from some of the industry’s leading authorities on mergers and acquisitions and family business issues.

RISE Announces New Governing Board Members and Officers

During its 24th annual meeting RISE (Responsible Industry for a Sound Environment) announced new officers and members elected to the 2014 Governing Board.