US consumers boosted their spending and their has been continual job growth but what we have no seen an increase is in their income. There has been a decrease in the savings rate which is due to the increase in spending. Is this a sign of a start of a recovery? At the very least it could mean that consumer confidence is regaining strength. However, this may be short lived because there is still a high price for gasoline which could cause people to start substituting gas for other goods and products they would have bought with that money.
http://www.npr.org/2012/03/30/149680235/consumer-spending-rose-last-month-but-income-lagged
4 comments:
Personally, I believe that CC is one of the keys to things improving in the future... therefore I feel positive with this trend
People spending more than what they are earning definitely indicates a rise in consumer confidence. Yet, it might not be a good idea to increase debt at this point.
A rise in consumer confidence is positive but not all-encompassing of the state of the economy. With last month being the top month for car sales since 2007, it is clear that consumers are feeling confident, but there is still a long way for the economy to come.
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