Households Hunker Down As Saving Rate Soars To Highest Since August 2011
Confirming that the economy continues to be on life support and that the consumer has been actively withdrawing from providing that key lifeblood so needed to regain the "virtuous circle" [RIP: XXXX-2009] is the just released revised personal consumer data, which showed even further retrenchment, as personal spending came unchanged in June on expectations of a modest 0.1% increase, while income rose 0.5% on expectations of a 0.4% increase (among other things due to "Contributions for government social insurance -- a subtraction in calculating personal income -- increased $3.5 billion in June, compared with an increase of $0.8 billion in May."). End result: the Personal Savings Rate (revised) rose from 3.6% in April, to 4.0% in May, to 4.4%, in June: the highest it has been since August 2011, just before the economy as manifested by the Fed's favorite metric, the Russell imploded. All those expecting the consumer to step up and pick up the pieces will have to defer hope and prayer for one more month. Luckily, for everything else there is the Fed's Taxpayercard.