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Biggest Drop In Personal Income Since Feb 2010 Can't Stop Borrowers Spending, While Savings Rate Plunges

Tyler Durden's picture


US personal income fell 0.1% MoM - missing the +0.3% expectations by the most since September 2011 - but that didn't stop spending which modestly beat expectations at +0.3%. The drop in incomes is the largest (absent the 2012 year-end debacle) since February 2010. Given the disparity, it is hardly surprising that the savigs rate dropped to its lowest since June. So unsaving is the route to freedom once again as borrowing helps drive durable good spending up 0.77%


As a result, and as expected, the personal savings rate plunged from 5.2% to 4.8%.


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Fri, 12/06/2013 - 09:52 | Link to Comment Dr. Engali
Dr. Engali's picture

It's hard to save when you get punished for it and you have that pesky need of having to eat.

Fri, 12/06/2013 - 10:15 | Link to Comment toady
toady's picture

You don't need to eat. It's all in your mind. A month or two at the reeducation camp will teach you that, and many other things

Fri, 12/06/2013 - 09:54 | Link to Comment LetThemEatRand
LetThemEatRand's picture

No worries.  All that wealth being generated at the very top by QE will trickle down and everything will be great.  The trickle down model has been working so well for the last 40 years or so, why would it stop now?  We just need to generate more wealth at the top to make it work better.  That's the answer.

Fri, 12/06/2013 - 09:57 | Link to Comment nickt1y
nickt1y's picture

We are in a trickle up world where the wealth of the 99.9% is trickling up to the 0.1%

Fri, 12/06/2013 - 10:15 | Link to Comment TWSceptic
TWSceptic's picture

trickle down

You keep using that word, I do not think it means what you think it means. The current administration does not believe in true trickle down economics (laissez-faire), that's why they think they need the fed to print to fund their stupid trickle up programs.

Fri, 12/06/2013 - 12:44 | Link to Comment MachoMan
MachoMan's picture

The administration hasn't been forced to have an opinion...  rather, it's simply a conduit.

Fri, 12/06/2013 - 09:53 | Link to Comment 101 years and c...
101 years and counting's picture

futures just ramped 10 whole points.  did h-rat just pen a 1200 word essay how the taper is off, but if it is on, it would still be bullish?

Fri, 12/06/2013 - 09:56 | Link to Comment 666
666's picture

I'm saving up for a platinum case to keep my EBT card in.

Fri, 12/06/2013 - 09:58 | Link to Comment Pig Circus
Pig Circus's picture

Who needs income when the Fed is printing it?

Fri, 12/06/2013 - 10:13 | Link to Comment pragmatic hobo
pragmatic hobo's picture

i don't get it ... if people are getting jobs, ... wouldn't income increase?

Fri, 12/06/2013 - 10:53 | Link to Comment toady
toady's picture

I'm not sure if I missed the /sarc tag, but the gains for the last year or two have been people expiring out of unemployment, 'leaving the workforce', not people getting jobs.

Fri, 12/06/2013 - 10:15 | Link to Comment Son of Loki
Son of Loki's picture

Just for fun I looked at some new model homes in the area last weekend and the sales offices were empty. I came across a couple of Yutes who looked bewildered and we began chatting. When asked what their issue was the young couple looked at me and with a look of amazement said, "Can you believe they want $1,000 deposit to buy a house. Who has that kind of money?"

I suspect they are the norm. Low/stagnat wages, zero yield on savings and the Yuteful urge to spend may be some of the reasons our system is in this dire shape.

Fri, 12/06/2013 - 11:44 | Link to Comment Crash Overide
Crash Overide's picture

Don't worry, Eric Holder will issue a mandate that banks must lend to people who can't afford the loan... Everything is fixed again.

Fri, 12/06/2013 - 12:51 | Link to Comment MachoMan
MachoMan's picture

The reason why the pending sales signs turn back to for sale signs is that no prospective buyer has any skin in the game...  literally, even for a $300k house, you won't have any earnest money exchanged with the purchase agreement...  Further, not only is there no earnest money, but in order to entice a sale, the seller will probably have to pay the buyer's closing costs, etc.

Fri, 12/06/2013 - 11:21 | Link to Comment yogibear
yogibear's picture

Bernanke and the rest of the Fed banksters, as well as Wall Street, indicate the sheeple to max borrow to spend.

The sheeple are doing what their told to do. Max out student loans, car loans and tap the house if you can.

Fri, 12/06/2013 - 21:44 | Link to Comment Iam_Silverman
Iam_Silverman's picture

Well, the DOW closed over 16K, things are better now.... Right?  Isn't the "wealth effect" kicking in again?

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