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US Savings Rate Slides As Personal Incomes Below Expectations; Real Disposable Income Growth Tumbles

Tyler Durden's picture





 

Moments ago the BEA reported the latest, November, data on Personal Income and Spending. For the second month in a row, Income, which rose a modest 0.2%, missed expectations of a 0.5% rise for the month, even as Personal Spending rose by 0.5% - driven by a 2.2% increase in spending on Durable Goods while Non-durable expenditures were unchanged on the month, in line with expectations. As a result, the US consumers dug even deeper into their meager savings, and in November the savings rate dropped once more, sliding from 4.5% to 4.2%, the lowest since January 2013, after hitting a high of 5.2% in September on "government shutdown uncertainty."

But perhaps most important, is that Real Disposable Income rose by just 0.1% in November, following a -0.2% drop the prior month. As a result, and as the chart below shows, the annual growth in Real Disposable Income has once again resumed its downward trajectory, and at the current pace of declines, it will likely turn negative as soon as next month.

 


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Mon, 12/23/2013 - 09:50 | Link to Comment erg
erg's picture

Anyone have change for a button? I just walk around with my pockets out.

Mon, 12/23/2013 - 09:56 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Yes we can......

Mon, 12/23/2013 - 09:59 | Link to Comment New England Patriot
New England Patriot's picture

Saving gets in the way of spending.

Mon, 12/23/2013 - 10:19 | Link to Comment czardas
czardas's picture

It's actually much worse than that.  We've devolved to the point where tax dollars are being spent urging folks to become dependent on one of the myriad government programs = SS, Medicare, Medicaid, Obamacare, Unemployment, Disability, scooters, etc.   Not much on saving or spending wisely or living frugally.  

Mon, 12/23/2013 - 11:15 | Link to Comment Lewshine
Lewshine's picture

This must be why consumer confidence is at an all time high!! The broker I get the more confident I become...It's biblical!

Mon, 12/23/2013 - 09:52 | Link to Comment TeamDepends
TeamDepends's picture

Forward Keynesian, or how I stopped worrying and learned to love the debt (bomb).

Mon, 12/23/2013 - 10:02 | Link to Comment B2u
B2u's picture

Did you say DEBT BOMB???  Here's the video...

 

http://www.youtube.com/watch?v=GXcLVDhS8fM

Mon, 12/23/2013 - 10:11 | Link to Comment TeamDepends
TeamDepends's picture

Hell yeah!!!  We strongly urge you to watch this video in its entirety.  Hillary be lovin' it!

Mon, 12/23/2013 - 09:56 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

Does this stat factor in EBT, which is the primary source of income for 47% of the nation? 

Without EBT our GDP would be FUBAR.

Mon, 12/23/2013 - 10:21 | Link to Comment Accounting101
Accounting101's picture

Now you are just being a dumbass. That 47% you refer to pay no federal income tax but they do pay state, local and excise taxes as well as a host of other fees. 88 year old Grandmas and teenagers working 12 hours a week are not our enemies, and yes they make up a large part of that 47%.

You must understand that you radio and TV will lie to you frequently. Stop being a tool for the Oligarchs. I know you think yourself to be clever, but its just not so. You're a classic rube.

Mon, 12/23/2013 - 10:35 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

Government is the enemy, you stupid fucking leech.  Now go suck obama's 2 inch cock, swallow, and come back with a response when you are done.

Mon, 12/23/2013 - 12:50 | Link to Comment Accounting101
Accounting101's picture

No, your fucking stupidity is the enemy. Oligarchical bitches like you are why the middle class is always losing. You have no idea what's happened over the last forty years economically and why the financial crisis of 2008 happened, or why we are still mired in an economic depression.

While you are jerking off to 47% fantasies, the big banks and the financial services industry is economically raping the rest of us. $23 trillion and counting. Fucking idiot!

Mon, 12/23/2013 - 14:39 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

The fact that you returned to comment as I commanded you to do is evidence that you suck cock and swallow cum, maggot, as I said above.  Now go back to jacking off watching govt grow and erode liberty.

Mon, 12/23/2013 - 10:53 | Link to Comment max2205
max2205's picture

Everyone is spending their tax refund now that ACA is blown up

Mon, 12/23/2013 - 11:19 | Link to Comment MachoMan
MachoMan's picture

I suspect that when everyone figures out uncle sugar is going to try and keep your refund to offset obamacare penalties, then there will be more than a few revised W-4s...  which will put even more pressure on governmental cash flow/budgets.  However, for this tax year anyway, I wouldn't expect to get a refund until mid to late March...  I guess folks could go to H&R Block, et al, and get an advance on their refund (which is really sad to see dozens of people lined up outside come tax season), but hopefully they don't feed that beast either.

Mon, 12/23/2013 - 09:58 | Link to Comment Ignatius
Ignatius's picture

I take it that that would be the 'Personal Savings Rate' in US dollars?

See what happens when they take away the free toaster.*

 

And then there's that heart stoppin' .1% interest rate.

Mon, 12/23/2013 - 10:25 | Link to Comment czardas
czardas's picture

Interest rates are the key.  CNBC has a good clip from Ron Paul explaining that inflation WAS occuring - just not in CPI.  The market is inflated as are bonds.  Debt is inflationary, the cost of health insurance is certainly inflationary...in essence, increasing the money supply ALWAYS causes inflation - but not necessarily in CPU.  Even now, the price of food continues to explode due to yet another round of size reduction.  Bagged greens have twice dropped in size while increasing in price.  Apples are at prices I never thought I'd see in my lifetime.

Mon, 12/23/2013 - 11:22 | Link to Comment MachoMan
MachoMan's picture

Cost push inflation in a highly regulated environment...  we have tremendous inflation, but the effect of it is largely mitigated due to regulatory control, e.g. the money gets parked at financial institutions as a backdoor bailout...  unfortunately, capital (used loosely) always finds a home and, well, some of the money that is supposed to remain tied up in the system ends up seeping out...  this is how we get price increases with stagnant to declining wages.

So not only do you have the cantillon effect, but you also have a direct subsidy...  must be nice.

Mon, 12/23/2013 - 10:00 | Link to Comment B2u
B2u's picture

Does this income include SNAP cards?  Government can hand out other peoples money and call it income for the receiptients...

Mon, 12/23/2013 - 10:01 | Link to Comment Rainman
Rainman's picture

Must. Borrow. Moar.

Let's have another round of Hoax and Chains !

Mon, 12/23/2013 - 10:01 | Link to Comment LooseLee
LooseLee's picture

Sounds like as good a reason as any for Pinko Commies to buy equities....

Mon, 12/23/2013 - 10:01 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

Does not matter what happens b/w now and year end...Ben is walking this market to the door (12/31) and even hell on earth won't stop him!

Mon, 12/23/2013 - 10:07 | Link to Comment firstdivision
firstdivision's picture

Core PCE up 1.1% YoY. and personal income is up only 0.6% YoY...LOL this is going to end well.  Only one thing wil save the current system, and that is for all top levels to take pay freezes and distribute more to the lower rungs.  That's not going to happen, so queue the systemic breakdown in t-minus 8...7...6...5...4...

Mon, 12/23/2013 - 11:25 | Link to Comment MachoMan
MachoMan's picture

The time to right the ship was over, at the latest, when TARP was passed (and I think that's being incredibly generous).  As a result, everyone is playing hungry hippos with uncle sugar's marbles.  Why would you need to be inconspicuous about it when the whole thing is sure to go under?  Better get it while you can.

Mon, 12/23/2013 - 10:05 | Link to Comment Callz d Ballz
Callz d Ballz's picture

Yeah, try pullin that Cyprus crap here.

Mon, 12/23/2013 - 10:13 | Link to Comment Debtonation
Debtonation's picture

I bet the Y/Y will go negative next month due to the December 2012 year end fiscal cliff anomaly.  We'll have to wait a few more months to confirm the negative trend.

Mon, 12/23/2013 - 10:17 | Link to Comment the not so migh...
the not so mighty maximiza's picture

i smell santa rally

Mon, 12/23/2013 - 10:22 | Link to Comment eddiebe
eddiebe's picture

Banana republic without growing bananas

Mon, 12/23/2013 - 11:17 | Link to Comment papaswamp
papaswamp's picture

Yes we have no bananas..crap how does that song go?

Mon, 12/23/2013 - 15:56 | Link to Comment negative rates
negative rates's picture

What, the bananas in the butt song? He don't go over so well!

Mon, 12/23/2013 - 10:34 | Link to Comment Never One Roach
Never One Roach's picture

Not sure where to spend my generous 0.00001% savings yield this year. Good Will or an exciting splurge at McD's?

Mon, 12/23/2013 - 10:38 | Link to Comment DebtSlaveZombie
DebtSlaveZombie's picture

These charts show trends and contain information that really tell the average person, investor or economist very little because we don't know where its going.  The personal savings rate "sliding" could be a function of low rate environments and savers are moving that money into other areas to get a better return and may have nothing to do with personal incomes being below expectations.  And real disposable income is so volatile that no conclusions could be drawn from the above data.  These are basically just like reading a thermometer.  If a thermometer reads 53° outside it tells you nothing about how your day will be.  Thats why its so easy to get the "analysis paralysis" disease.  You look at 100 different charts and trends long enough you can talk yourself out of or into just about anything.  There is some stability in the markets now and the future will still be rocky but the societal and economic collapse being talked about on here is not happening.  We are gonna have a few periods of market sell off and decline but the recovery is underway, no matter how painful that is to hear for those of you down 30% on the gold trade.  And the "pain trade" will get much more painful.  Gold will hit 1050 by summer of 2014 and 850-900 by summer 2015.  The risk fears that ran gold up simply arent there.  When all central banks around the world are working in unison to fix the "problem" it can take decades for the cracks in the foundation to give way.  Hell, Japan is into 20+ years of it!!! But if you wanna be loose with your money and buy gold all the way down to 800...so be it.

Mon, 12/23/2013 - 10:38 | Link to Comment 22winmag
22winmag's picture

Are the good guys in the Pentagon and the military going to allow a real false flag to occur? We shall see.

Mon, 12/23/2013 - 10:40 | Link to Comment DebtSlaveZombie
DebtSlaveZombie's picture

I would love for a "gold bug" to explain to me why buying gold here makes sense.  And please, leave out the "currency collapse" and "economic collapse" stuff and explain to me how buying gold makes ANY sense at this level when the fed is doing a modest taper, rates will slowly rise, equity returns are gonna be in the 12-15% area for 2014 and fed funds rates are fixed permanently low.  Why would you invest in gold under current conditions??? It makes no sense.

Mon, 12/23/2013 - 10:49 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

exactly, just load the boat with facebook and twitter.  they go up 1-5% per day and beat the markets paltry return of only low double digit percent gains per year. 

Mon, 12/23/2013 - 11:18 | Link to Comment papaswamp
papaswamp's picture

I assume you are talking physical and not paper.

Same reason you buy flood insurance....Catastrophic loss event.

Mon, 12/23/2013 - 12:01 | Link to Comment MagicMoney
MagicMoney's picture

Actually it doesn't. Gold only responds to perceptions of inflation, ie inflation expectations, & real inflation, or inflation you cannot deny like in the case of Venezuela. Does this mean you should shun gold? Nope. You should be accumulating gold. It's not your primary source of investment for enhanced liquidity in a dollar confident economy "RIGHT NOW", but definitely should be made provisions for the future, when the dollar economy won't be as glamorous. Indeed the use of the dollar is being becoming less, and less the more the dollar is unstable, and is debased. 

 

You must understand market psychology. The markets don't always get it right. They are speculating just as much as you are. They have a bias, and lean toward a bias. Doesn't make them right. Fact is the US is debasing it's currency. It hasn't manifested into undeniable unacceptable inflation yet, but the tendency is in that direction.

 

Banks are loaded up on excess reserves of created money, do you really want to wait until those reserves are unloaded, and creates rampant inflation to determine to buy gold? By then it's too late. If you move with the market, instead of thinking ahead of the markets, you will make money with the markets, but also lose money with the markets. Heh. Thinking ahead of the markets is what really counts. Moving with the markets is easy, and every sucker does it until they see the market bail. 

 

Do you really want to wait until inflation takes hold? By then it's too late. Jumping off the cliff realizing your have no parachute, well it's too late. Gold is real money. Fiat currencies come, and go. Historically this is the case, to suggest that "king dollar" will stay forever, or for the next 1,000 years is just naive and really just a figment of the imagination.

 

I agree with Marc Faber, you should be accumulating gold. Not even close to saying dump all your dollars for gold. Accumulate gold slowly, while making more money on other investments. Gold is a insurance policy, it's a hedge, not a source of riches to profit from.

Mon, 12/23/2013 - 12:31 | Link to Comment zaphod42
zaphod42's picture

Buying real gold makes some sense, even to a non-gold bug like me.  It is a commodity, and has a fairly high value (historically one oz Troy = 1 week of work for average worker).  Basically it is a place marker, indicating the relative value of your personal fiat currency - be that dollars, euros, yen or bit-coins, and as such a measure of inflation.  In the event of wild inflation (almost guaranteed at some point, even if after a period of wild deflation), it would be nice to have some of this on hand to trade for other goods.  Otherwise you are stuck with trading labor for good one-on, which is not a very workable plan in a complex economy.

I like the idea of holding about 20-25% of assets in metals, and silver is rather more volitile, so say gold.  If you are over 65, it might be better to hold 1/3 in gold, just for safety's sake.

Craig

Mon, 12/23/2013 - 11:16 | Link to Comment GubbermintWorker
GubbermintWorker's picture

If you don't eat your meat you can't have any pudding.

 

Oh, and I have saved a LOT. It's just that its.....off the record. ;)

Mon, 12/23/2013 - 11:39 | Link to Comment MagicMoney
MagicMoney's picture

I expected that the revised GDP for November boost in consumer spending is from consumers tapping into their savings. Real growth in consumer spending comes from higher real wages, but to a Keynesian mind, savings are bad. Spend all your money.

 

The fallacy of GDP is that it constitutes increases in consumer spending with economic growth. Consumption has to be funded by production. Pretty basic economics. If consumption requires that assets need to be sold to fund consumption, this is basically capital consumption thus progress toward the natural state of poverty. Hahahaha. Savings are an asset, just as much, if not more than a house is an asset. In the end savings lead to consumption sometime in the future. They just accumulate for enhanced consumption. Increases in consumer spending does not change the fact that a lot of consumers are a broke down car away from insolvency.

Mon, 12/23/2013 - 11:29 | Link to Comment rsnoble
rsnoble's picture

And confidence is at highs? Must be the prozac.

Mon, 12/23/2013 - 12:22 | Link to Comment zaphod42
zaphod42's picture

Just a thought and a prediction.  As time goes on, and wages continue to fall as real inflation increases, there will be some savings during the year and much lower consumer spending beyond food, shelter, fuel/transportation and necessary clothing replacements followed by normal or perhaps above past normal levels of holiday spend.  People will save all of their 'extras' for gifting.

'Twould explain many charts, IMO.

Craig

Mon, 12/23/2013 - 15:12 | Link to Comment MFLTucson
MFLTucson's picture

And consumer confidence is at a 6 year high? Bullshit!

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