Spending On Services Jumps By Most Ever As Incomes Disappoint, Savings Rate Near Five Year Lows

Tyler Durden's picture

Despite expectations that following several months of subpar income growth offset by rampaging spending and thus a plunging savings rate, March incomes would rise by 0.4%, while spending would be flat, this did not happen, and instead both spending and incomes rose by the same amount, or 0.2% in the past month. Worse, when adjusting for inflation, real disposable income rose just 1.1% compared to last March, and just barely above the 0% breakeven. On the other side, real spending was up 2.2% Y/Y just barely above the 2% recessionary threshold. And even that number is misleading as spending on Total Goods (including durable, already known as being quite abysmal, and non-durable), dropped by $32.8 billion in nominal dollars. What was the offset? Why a massive surge in consumption expenditures on services, which rose by $53.8 billion, which absent the spending aberation for September 11, 2001, which was reversed in the following month, was the biggest monthly increase on record! What drove this record services spending spree is anyone's guess. 

Durable Goods spending- down:

Non-Durable spending- also down:

... but Services Spending- up, up, up... Record up in fact:

Real disposable income: oops.

Finally, since both spending and income rose at the same pace, the personal savings rate was flat from February, or at 2.7%: just barely higher than the 5 year low of 2.2% posted in January. In other words consumers continue to be tapped out, and it is unclear where the income spurt will come from to drive the much needed spending surge in the coming months. Oh yes, Bernanke's trickle down magic of course. How could we forget.

And if everything else fails, the Fed, tired of monetizing debt, can just step in and start buying goods and services. After all what better way to truly goose the US economy than by outright monetizing not securities but actual inputs into the GDP equation...


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MFLTucson's picture

This is part of a comedy act, right?  Incomes down and people re buying more services?  Makes perfect sense in a world of make believe.

Bearwagon's picture

"Here's to stinkin' rich!! Yea!! Stinkin' rich!!"

kliguy38's picture

No....here's to your masters that have been behind the curtain for your entire life making you believe there is a left/right paradigm that you ROOT for.......so go ahead and pick a side......hehheheheehe......pick it!!!.....because whether you pick curtain 1,2,or 3......its all the SAME poison......so go ahead pick your "side"...btw the "stinkin" rich are relative..... a multi millionaire to these guys is "DIRT".....a billionaire is just another dirtball.  

Zer0head's picture


you mean like energy bills from your local utility that recently installed smart meters along with time of use price increases or could it be that monthly bank statement with its no fee checking for a paltry $25/mth - is iTunes part of services or that 3 year contract with your mobile provider

ihedgemyhedges's picture

Services refers to bankruptcy/divorce attorneys, short sale real estate agents, strippers, etc.......

Stoploss's picture

Don't forget labor services..

No one pays any attention to this but, your local electrician, plumber, HVAC, etc, per hour labor charges generally go up in lockstep with food and energy costs.

A very simple rule of thumb to detect inflation at the bottom level is to watch services labor rates.

All this is, is the reflection of the inflation manifested as higher labor costs to consumers giving the illusion that funds are being spent on services, when in fact what is happening is that the consumer is simply being ripped off.. 

Labor services rule, always have and always will.  If you want your water heater put in and brought up to code cheaper, do it yourself.

espirit's picture

Discretionary spending rose YoY? 

What koolade are the statisticians drinking?

kentfinance's picture

and tax returns. seasonal jumps in march?

Dapper Dan's picture

Smart Meters came first, now comes the technology to interface with meter. all part of the plan.

The installer of my smart meter told me it would save me money. 2 years later, still no savings.



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  • Computer chips will take control of home appliances when energy is low
  • Sensors will detect spikes in demand for power and when grid struggles to meet it, will temporarily shut off appliances
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Read more: http://www.dailymail.co.uk/news/article-2315863/Big-brother-switch-fridge-Power-giants-make-millions--pay-sinister-technology.html#ixzz2RrTMyG55
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Miffed Microbiologist's picture

Why did you let them install a smart meter?? A guy came to my house and knock on my door stating he was there to install this wonderful smart meter. I told him I didn't want it and to get the fuck of my property. He stared at me in shock and went into some long speal how wonderful it was. I repeated myself in stronger tones and pointed out he was eliminating he own job as a meter reader. This guy looked at me like I was crazy but finally left stating I was going to pay more in monthly fees by not installing it. I have solar and pay about $50/ year to San diego gas & electric so having independence is worth far more to me than their shitty fee. God, don't give them more control than they already have!


Bearwagon's picture

"pick it!!!" ... Hm ... okay, I'll pick up my ball and go home ...    ;-)

(edit: By the way: the "Stinkin' rich" is a quotation from the movie "Time Bandits")

francis_sawyer's picture

So I guess the price for hookers & coke just went up...

espirit's picture

Hehe, matrix metrics - bitchez.

ihedgemyhedges's picture

Don't know about coke. Never touched it. But high end hooker ass is in high demand and commands a premium price. Or, so I've been told....

DosZap's picture

Don't know about coke. Never touched it. But high end hooker ass is in high demand and commands a premium price. Or, so I've been told....

Who's got the coins to pay high end hookers?.

Never saw a woman I would pay for sex.Some hard UP morons running around.(must be the Depressed).

insanelysane's picture

The poor?

"Oh you must meet them. I'm sure you'll like them. Of course they haven't got two pennies to rub together but that's because they're poor."

TeamDepends's picture

Yeah, remember 9/10/01?  Rummy Rumsfeld:  Whoopsie, there are 2.3 Trillion $ missing from the Pentagon budget....

Sudden Debt's picture

.... dude... everybody has lost at least once in his lifetime his wallet.... Rummy did it also and everybody keeps blaming him...


TeamDepends's picture

Maybe deep in the bowels of the Pentagon they already have trillion dollar coins?  But how would you lose .3 of one?

sbenard's picture


GetZeeGold's picture



We need a strapping young socialist muslim to get us through this.

MFLTucson's picture

Anyone see the jobs bill amonst the gun, gay and abortions headlines?  

GetZeeGold's picture



Not really. I think the number of poeple that actually care about jobs is only like 4%.

Sudden Debt's picture



TeamDepends's picture

Yeah, for the people who put the fun in funeral.  (Thanks Cleveland)

Baader's picture

No, your Foreign Policy is enough in this regard.

spankthebernank's picture

an emaciated, nicotine addicted sociopath NWO'er you mean?

Miss Expectations's picture

What do you mean strapping...is that some sex thing?

DosZap's picture

What do you mean strapping...is that some sex thing?

That's what Bawney Fwank gets, except he gets real meat.

vote_libertarian_party's picture

I think the services spending surge must have been DC lobbyists getting overtime trying to get their clients off of the sequester cuts list.

francis_sawyer's picture

The sequester is a joke...


If Obama was serious about getting things under control, he'd have appointed a 'CHEESE CUTTING CZAR' by now...

insanelysane's picture

Still waiting for them to cut the $500b/yr in fraud and abuse in Medicare that they promised to do once Obamacare was signed those many years ago.  Any day now, I'm sure.

francis_sawyer's picture

Cheese Cutting Czar... It's the only hope... I'm surprised that idea hasn't crossed the teleprompter yet...

Yes_Questions's picture



TAX returns?

Ammo Broker Finder Fees?

Ancona's picture

Looks like I'm not the only one who is broke-as-a-joke.

I keep watching prices go up year after year after year, while my salary remains static, or as was the case in 2009, I am asked to take a pay cut "for the good of the company". I was a good soldier and took the cut, yet have not seen a raise since then.

Recovery? What recovery?

MilleniumJane's picture

Yep, no cost of living raise for me after almost 5 years.  No recovery at all for my household.  Seems TPTB have redefined recovery as "You Have a Job.  Now Get Back to Work" or "You Have SNAP.  Now Suck It."

RKDS's picture

Same here.  Can't even get a raise in the public sector these days.  Yet, somehow, taxes keep going up.  I fear the rich are like my first cat; they won't stop eating until they explode.

kito's picture

services up?? here is the reason:




in other news, prostitution has now been heavily weighted by the govt in gdp contributing factors...............................

espirit's picture

Pay by the piece (ASE), or pay for the rest of your life?

Cursive's picture


Voodoo pu-naan-ee = high grade intangibles

q99x2's picture

A lot of people bought BitCoins.

j.tennquist's picture

Yes, but do hookers accept Bitcoin?


Cognitive Dissonance's picture

"Worse, when adjusting for inflation, real disposable income rose just 1.1% compared to last March, and just barely above the 0% breakeven."

One of the "benefits" of "official" lying about the "official" rate of inflation is that it enhances all the other "official" numbers.


d edwards's picture

Just wait until we get the new and improved GDP numbers in July-more bogus gov't lies.

Seasmoke's picture

Public Employees are a service we do NOT need !

yogibear's picture

Their guaranteed by the government to increase by 3%, They said so. They are adding more BS and cooking to increase the numbers and decrease the dbt to GDP ratio.

All's well so let's increase debt and blow all the money. The fed will print up Fed dollars to buy it.



ultraticum's picture

"The Fed can just step in and start buying goods and services . . . ".  I think they started with ammo.

Cognitive Dissonance's picture

The plebs? Let them eat cake lead.