I don't know if this is good economic news or not, but it suggests that people may be starting to take on more debt again.
Consumer Spending in U.S. Increases More Than Forecast
But on the other hand:
Real wages are falling pretty fast. However the rise in tax rates may explain most of the fall, so maybe that's just a one-off.
Latest GDP figures are quite healthy though, despite the government shutdown:
They probably would have been even better without the shutdown. Hopefully we will avoid such nonsense this year.
Consumer Spending in U.S. Increases More Than Forecast
Quote:
Consumer spending in the U.S. climbed more than forecast in December even as incomes stagnated, showing the economy needs to generate bigger gains in employment to boost the expansion. |
Quote:
The report follows data yesterday that showed household spending rose in the fourth quarter at the fastest pace in three years, helping the economy overcome the fallout from the federal government shutdown. At the same time, absent bigger gains in pay, Americans will probably have difficulty sustaining the pickup into early 2014. The increase in consumer spending “is a good sign for sustaining economic growth,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who correctly projected the gain in spending. “Job creation will have to accelerate to sustain the current level of spending.” |
But on the other hand:
Quote:
Disposable income, or the money left over after taxes, dropped 0.2 percent in December after adjusting for inflation from the prior month, the biggest decrease since January. Over the past 12 months, it fell 2.7 percent, the largest year-to-year drop since November 1974, reflecting the impact of the expiration of the payroll tax break, the increase in some income taxes earlier in the year and weak wage gains. Less Saving The saving rate decreased to 3.9 percent, the lowest level since January, from 4.3 percent. Wages and salaries were unchanged in December from the prior month. |
Real wages are falling pretty fast. However the rise in tax rates may explain most of the fall, so maybe that's just a one-off.
Latest GDP figures are quite healthy though, despite the government shutdown:
Quote:
Gross domestic product grew at a 3.2 percent annualized rate in the final three months of 2013, following a 4.1 percent pace from July through September, a Commerce Department report showed yesterday. Consumer spending climbed at a 3.3 percent pace, the best quarterly performance since the end of 2010. |
They probably would have been even better without the shutdown. Hopefully we will avoid such nonsense this year.
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