Americans earn more yet spend less according to the US Commerce Department:
Instead, they put aside more of their income — or at least, borrowed less and drew down assets less. As a result, the personal savings rate in September, though still negative, was less so than it has been in a year and a half.
The Commerce Department reported today that personal income in September rose at an annual rate of 0.5 percent, seasonally adjusted; the figure for August was 0.4 percent. Personal consumption spending, on the other hand, was essentially flat, rising at an annual rate of only 0.1 percent in September after 0.2 percent in August.
[…]
“Rapid acceleration in spending is extremely unlikely, given the expected drag from the ongoing correction in the housing market,� said Brian Bethune, an economist with Global Insight. “The upshot is an economy that is expected to grow at moderate rates, with less pressure on core inflation. That should keep the Federal Reserve’s finger off the interest-rate trigger for the next two quarters at a minimum.�
As Brian Bethune points out (as quoted in the article), it does not seem to be per definition negative, this development.
Any thought on this from our local economic experts?
P.S. I apologize for the short posts today, I simply do not have a lot of time.
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