Savings Rate Rises From 4 Year Low As Spending Tumbles, Income Boosted By Government Transfer Receipts

Tyler Durden's picture


While expectations for today's March Personal Income and Spending were for a rise of 0.3% and 0.4%, which if confirmed would have pushed the 3.7% savings rate to the lowest since 2007. Instead we got a reversion, with Income rising 0.4%, higher than expected, while Spending printed at 0.3%, the lowest since December 2011, just below expectations, and tumbling from February's 0.9% print, the biggest slide since August 2011. In real terms, spending was up 0.1% and income up 0.2%. The data also confirms that at every moment somewhere in the world, people are laughing at Joe LaVorgna, whose forecast of a 0.6% rise in personal spending was just 50% off. Most importantly, the surprising inversion between spending and income, pushed the savings rate from 3.7% to 3.8%, just shy of 4 year lows, and the first increase in 2012, although well below the 4.9% savings rate in March 2011, which means that increasingly the consumer is tapped out. When one takes away the impact of the record warm winter (of which March data was still part of), it becomes quite clear that unless Joe Sixpack is charging everything, then Q2 GDP will be a very big disappointment.

What is odd is that incomes in March did not increase due to an abnormal rise in wages:

Private wage and salary disbursements increased $17.3 billion in March, compared with an increase of $24.1 billion in February.  Goods-producing industries' payrolls decreased $1.3 billion, in contrast to an increase of $1.8 billion; manufacturing payrolls increased $0.1 billion, compared with an increase of $1.6 billion.  Services-producing industries' payrolls increased $18.6 billion, compared with an increase of $22.3 billion.  Government wage and salary disbursements increased $1.4 billion, compared with an increase of $0.7 billion

Instead, for those wondering what generating a big portion of the rise in Personal Income, look no further than your favorite welfare state (source):

Personal current transfer receipts increased $11.6 billion in March, compared with an increase of $0.3 billion
in February.  Within current transfer receipts, government social benefits to persons for social security increased
$6.8 billion, compared with an increase of $2.6 billion.

In other words, if it wasn't for the government, the savings rate would be at the lowest since 2007.

The consolidated ugliness in its full front, courtesy of Bloomberg:

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Mon, 04/30/2012 - 08:48 | 2384691 PaperBear
PaperBear's picture

Was this why the cartel smacked gold/silver ?

Mon, 04/30/2012 - 08:50 | 2384695 SheepDog-One
SheepDog-One's picture

Must be, I guess. Little temper tantrum against the 'savers' gold.

Mon, 04/30/2012 - 08:56 | 2384709 anonum
anonum's picture

Zesus. The more I see these kind of waterfall attacks, the tighter I hold on to my bullion.
It all just signals the immense level of desperation on the EE side.

Mon, 04/30/2012 - 09:00 | 2384719 idea_hamster
idea_hamster's picture

‘My other piece of advice, Copperfield,’ said Mr. Micawber, ‘you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and - and in short you are for ever floored. As I am!’

Mon, 04/30/2012 - 09:14 | 2384738 Manthong
Manthong's picture

Yeah, but what about annual income twenty pounds, annual expenditure nineteen and six with  inflation one and five and the crown decreeing zed interest?

Mon, 04/30/2012 - 09:54 | 2384838 economics9698
economics9698's picture

“Dog, it’s for dinner tonight.”  Obama

Mon, 04/30/2012 - 08:51 | 2384697 JustObserving
JustObserving's picture

Do they need a reason to smack gold and silver? It has become a habit now.

Mon, 04/30/2012 - 08:53 | 2384703 cossack55
cossack55's picture

For the Cartel, its sexual.

Mon, 04/30/2012 - 10:26 | 2384973 dbomb12
dbomb12's picture


Dutch central banker's memoirs confirm gold price suppression

Mon, 04/30/2012 - 08:57 | 2384702 GetZeeGold
GetZeeGold's picture



They're subsidizing the metals for themselves.....with public funds.


They're gonna make Jon Corzine look like an amateur.


Mon, 04/30/2012 - 09:16 | 2384741 Ruffcut
Ruffcut's picture

I will sell some silver and buy some useless shit from chiner. My spending on booze has increased, does that count?


Mon, 04/30/2012 - 08:53 | 2384704 SheepDog-One
SheepDog-One's picture

'Joe 40 oz' charging all his necessities such as iPads and string ruffle dust cover duvets, at 20% interest? 

Mon, 04/30/2012 - 08:58 | 2384713 ACP
ACP's picture

What a devolution for Joe. Joe 18 pack in 2005, Joe 6 pack in 2009, all the way down to Joe 40oz.

Not much farther Joe can go, except maybe for maybe Joe Night Train or Joe Thunderbird.

Mon, 04/30/2012 - 09:02 | 2384722 SheepDog-One
SheepDog-One's picture

Yep sittin in an alley with some screwtop wine...but its all good he's got his iPad and can check Facebook status and his Farmville crops.

Mon, 04/30/2012 - 09:32 | 2384781 GeezerGeek
GeezerGeek's picture

We can call that the Ripple effect.

Mon, 04/30/2012 - 09:56 | 2384844 aheady
aheady's picture

+ 1 bottle of champipple

Mon, 04/30/2012 - 08:53 | 2384705 Confundido
Confundido's picture

They are upset we fucked their asses on Apr 25th, when within an hour, they lost everything they sold, unsuccessfully trying to break us below $1,625/oz. So, they now seek revenge and because they play with other people's monies, they will keep doing so until they run out of them.

Mon, 04/30/2012 - 08:55 | 2384708 Confundido
Confundido's picture

Did anyone notice how, before they sold gold down to $1,647-50...somebody, some misterious hand had been selling the Canadian dollar? I am sure this goes beyond the metal itself. Someone does this to the metal, to really sell short miners.

Mon, 04/30/2012 - 09:24 | 2384760 Village Smithy
Village Smithy's picture

Agreed, where there's smoke there's fire. The question I'm grappling with is do they want the miners and so are grinding down the price to buy as cheaply as possible, or do they know something and are just getting out of gold miners as fast as possible? My money is going on the former.  

Mon, 04/30/2012 - 09:36 | 2384792 GeezerGeek
GeezerGeek's picture

Maybe China is forcing US entities to keep the prices of gold, silver and miners low so they can buy at low prices. Of course thinking this would require one to don the appropriate tin foil hat, and we all know that Obama would never cave to China's demands on something like this, even surreptitiously.

Mon, 04/30/2012 - 10:01 | 2384862 MachoMan
MachoMan's picture

China isn't the only country that benefits from low PM prices...  sure it serves the purpose of helping to mask printing/inflation, but I believe it's also a favor for favor in many regards...  remember, this whole thing requires a fairly choreographed concert...  and everyone loves gold (especially when we're peaking out on fiat).

Mon, 04/30/2012 - 08:57 | 2384710 q99x2
q99x2's picture

It is all good for stocks. FB put ramp about to start. To the moon Alex.

Mon, 04/30/2012 - 09:04 | 2384724 Silverhog
Silverhog's picture

This so called recovery is not passing many smell tests.  

Mon, 04/30/2012 - 09:07 | 2384728 SheepDog-One
SheepDog-One's picture

Like Becky Quick says whenever someone points out its all heading straight down... 'But, we're FEELING better'.

I'm sure she feels OK, she gets driven to work in a limo....for the rest of us, not so much.

Mon, 04/30/2012 - 09:17 | 2384745 EscapeKey
EscapeKey's picture

People willingly put on that propaganda?

Before you know it, individuals who the state forcefully "re-educate" will be forced to sit through that informercial crap.

Mon, 04/30/2012 - 09:16 | 2384740 XtraBullish
XtraBullish's picture

The only thing that worries the CNBS crowd is whether the banks/brokerages are making any dough. Ad revenue pays their salaries and a crashing Wall Street means Becky loses the four Filipino nannies that wipe her kid's ass.

Mon, 04/30/2012 - 09:17 | 2384744 lizzy36
lizzy36's picture

The government is subsidizing the  soft landing in American living standards for the bottom 80%. 

This should not be news for people that read ZH.

The issues is when will Yanks wake up and realize this is what is happening?

Mon, 04/30/2012 - 09:20 | 2384752 Shizzmoney
Shizzmoney's picture

I checked my pockets this morning. 

Lint is up 0.7%.

Mon, 04/30/2012 - 12:51 | 2385346 SemperFord
SemperFord's picture

Great job Mortimer!!!


Mon, 04/30/2012 - 09:20 | 2384753 therearetoomany...
therearetoomanyidiots's picture

But...wait...TeeVee, even the WSJ told me that personal spending was 'bright spot' in the latest numbers, last week. 


Did they forget that maybe the reason spending is up is because food prices are blowing through the roof???

Mon, 04/30/2012 - 09:25 | 2384761 Peter Pan
Peter Pan's picture

Something tells me that increases in savings are being outrun by increases in all levels of government debt. So what's the point?

Mon, 04/30/2012 - 09:31 | 2384778 Ignorance is bliss
Ignorance is bliss's picture

Joe Six is trying to save something. My neigbors don't know what the hell is going on, but they sense something over the horizon. I'm guessing we are taking the first step toward hoarding.

Mon, 04/30/2012 - 09:41 | 2384802 scatterbrains
scatterbrains's picture

any of my robotoads notice apple never did break a higher intra-day high off the earnings pump?  While everyone is chasing the pump higher AAPL isn't really trying to feel the love.. oops there goes the 6 hundreds.

Mon, 04/30/2012 - 09:42 | 2384809 spentCartridge
spentCartridge's picture

Must be a temporary price takedown because my favoured online dealer always suspends selling metal on such occasions ...

Today, they are closed because they have no 'live' price.

Mon, 04/30/2012 - 09:45 | 2384820 Yikes
Yikes's picture

 it becomes quite clear that unless Joe Sixpack is charging everything, then Q2 GDP will be a very big disappointment.


I'm guessing they're charging everthing.

Mon, 04/30/2012 - 09:47 | 2384827 Ranger4564
Ranger4564's picture

What good is an increase in savings when for most people most of it is in paper or currency that's about to wither?  Who cares how much you save when the banks can print multiples more, to overwhelm and undermine the value of your hoard?

Until we can convince the neighbors to abandon fiat for metals, the world will continue indebting more and more future generations, till the word freedom just gets erased from the dictionary and memory.

Therein lies a surprise... if you forgot what freedom is, can you aspire to it? And if you never experienced a humane world, can it ever surface? How do you know that what you want is not just the best for yourself but others too? I realize these are very simple questions, but the only limit to possible answers is your imagination.  Dream a little dream... how do you know that the current world we live in is the most free we can be? At what cost?  The Mayans used to sacrifice people to placate the gods to bring prosperity... we just sacrifice the neighbor. You call that progress?

Mon, 04/30/2012 - 09:54 | 2384836 jtmo3
jtmo3's picture

"it becomes quite clear that unless Joe Sixpack is charging everything, then Q2 GDP will be a very big disappointment."


What are you smoking? Have you not heard of the pencil and eraser to "massage" the data? Since when does reality interfere with .gov data?

Mon, 04/30/2012 - 09:55 | 2384841 Ted Baker
Ted Baker's picture


Mon, 04/30/2012 - 10:18 | 2384940 i-dog
i-dog's picture

Time to dig the shit out from under your caps lock key, dude.

Mon, 04/30/2012 - 10:01 | 2384866 lolmao500
lolmao500's picture

Gonna be epic when the size of government has to be slashed by 50%+ overnight when Bondzilla wakes up from his slumber.

Mon, 04/30/2012 - 10:02 | 2384873 nick howdy
nick howdy's picture

You mean Joe Sixpack isn't buying the same ol' MSM bullshit? You know Joe..if you don't start spending we'll have to do another False Flag on your unpatriotic ass..Spend you muppets SPEND! EAT! GET SICK! DO (PRESCRIPTION ONLY) DRUGS! DRINK!


CONSUME! If you people stop your rabid consumption...You'll fuck up our New World Order...Ingrates..

Mon, 04/30/2012 - 10:45 | 2385020 HungrySeagull
HungrySeagull's picture

Savings my ass.

It's pooling the money to pay the bills to be left alone to drink in peace.

They forgot the welfare cards make for good underground trading off-grid.

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