Personal income up, consumers saving more
June 27, 2014 – The Commerce Department announced that personal income levels rose 0.4 percent in May, but it seems Americans are saving that money rather than increasing spending.
Personal spending went up 0.2 percent, but the increase matched increases in prices, tying the numbers to inflation rather than a change in spending habits. According to the Wall Street Journal, the saving rate reached the highest level since September.
The Journal said many economists expect the current quarter to result in a “decent rebound”; the slight gain in consumer spending could be the result of consumers having delayed purchases such as cars during the cold winter weather.
NAFCU Senior Economist Curt Long commented, “The Federal Reserve’s preferred measure for inflation increased to 1.5 percent. This is still below their stated target for inflation, but will be something to watch next year as anticipation builds for the expected increase in short-term rates.”
The NAFCU research team has prepared Macro Data Flashreports on the latest economic data on vehicle sales, retail sales, inflation and other metrics.
Wall Street Journal article
NAFCU Macro Data Flash reports