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US Consumers Once Again Saving, As April Income Outpaces Spending
According to the BEA's April consumer income and spending data, personal income increased by 0.4% in April, in light with expectations and the same as in March (revised). Expenditures, however were flat with March, after posting a 0.6% increase in current dollars in March, and below expectations of 0.3%. May data will likely demonstrate increased frugality courtesy of the explosion in market volatility, the flash crash, and the market correction. The only favorable outcome of this data is that the US personal savings rate increased from a revised 2.8% to 3.2% in April, which however is still in line with the lowest readings since late 2008. Another good data point: "Government wage and salary disbursements increased $1.9 billion, compared with an increase of $2.9 billion." Stunningly the centrally planned state allowed the salaries of its workers to increase less than those of the private sector: "Private wage and salary disbursements increased $24.4 billion in April, compared with an increase of $13.7 billion in March."
And some other central planning observations:
Personal current transfer receipts decreased $4.8 billion in April, in contrast to an increase of $35.4 billion in March. The March change reflected an increase in emergency unemployment compensation, which boosted personal current transfer receipts by $18.6 billion at an annual rate in March.
Contributions for government social insurance -- a subtraction in calculating personal income -- increased $3.7 billion in April, compared with an increase of $2.7 billion in March.
And finally, a brief note on that all imporant missing link in the government budget - taxes:
Personal current taxes decreased $3.2 billion in April, in contrast to an increase of $2.6 billion in March.
Chart of Personal Tax Rate below:
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How pathetic - just when the savings rate dips to 3.1% a stick save that everyone is back to savings mode as the wage numbers "spike" and transfers retreat. Of course this will be revised away in a few months. Disinformazia
Is the BEA counting tax as savings now? Nothing would surprise me anymore.
The fraud in the statistics is out-of-this-world. I'm glad you won't be surprised by anything, because that's what they are doing.
For example, they double-count employment. If you're a government employee, you get a W-2, and that counts as employment. PLUS, we count "dollars government spent" as employment ALSO. So, government employees got counted ONCE through the W-2, and AGAIN through merely adding-in-again the government budget.
Jail is too good for these central planners.
Are they saving or paying down bone crushing 29% credit card debt? Since the big banks cut everyone's credit limit and raised rates it seems likely that the so called savings is actually paying off of consumer credit.
http://www.youtube.com/watch?v=G_DV54ddNHE
Really, is it a big surprise that people are saving after going through a massive debt crunch? I'm sure those that lost their jobs last year and found employment are less likely to spend than save at this point. Additionally as someone noted earlier, most are paying down the credit card debt they have racked up making ends meet over the past year with a spouse out of work.
"Government wage and salary disbursements increased $1.9 billion, compared with an increase of $2.9 billion." + "Private wage and salary disbursements increased $24.4 billion in April, compared with an increase of $13.7 billion in March." ..... and then "Personal current taxes decreased $3.2 billion in April, in contrast to an increase of $2.6 billion in March".
How did they do it?
Double-counting (direct statistical manipulation), and deliberate over-payment on deductions. For example, there are stories in my area about how the IRS is automatically adding in "tax credits" (like for dependents) and adjusting your return without your input, even though you've already determined you were not eligible for those deductions.
It's a "stealth stimulus" -- they are mailing checks to everybody and their non-existent brother.
Outstanding. This makes investing easy. Stay in cash (and cash equivalents like PMs) until QE 2.0 starts. Then, when Benny fires his last round of money printing, jump back into risk assets and ride the wave to hyperinflation. Carry on.
Hey Gunny, I had planned to do that. But now I am begining to see that the markets have already anticipated the QE/inflation disaster buy borrowing big time and investing in commods, equities and futures. The beauty of getting debt at 0.25% and and using it for the carry trade is that the hyperinflation will abolish your debt at the same time push up the value of your assets, to infinity and beyond.
Only problem is that when I put my application in for a trillion they wouldnt go for it. They said only the Chosen Ones could play that game.
Zero point zero four percent. Is that even within a reasonable margin of error? You think dear Uncle can measure things that good? Absurd.
Reminds me of all those reports of what the economy "Probably" did. And the check is in the mail. Whee!
We need another headline to discredit a rumor that doesn't exist, like "China not planning to nuke USA".
Or like China supports Europe, hahaha. Be sure to buy lots of stock on that one. Oh, and be sure to call it a "rally."
Wake me up after they've all gone broke. I got something I want to sell them. Hint: it spans a river.
Hell yeah. As long as we're living in the land of make-believe, just make the shit up.
People were paying down debts and paying taxes.
Good. Save and starve the beast America.
Savings bad for the economy! Support Ipad, WalMart, use your plastic! Spending is stimulating!
The savings must be money previously used to pay the monthly mortgage, for I can't believe where else the savings would come from.