Posted on 05/01/2020 8:02:55 PM PDT by fluorescence
U.S. incomes fell in March but not as much as spending, pushing the savings rate to its highest level in 39 years, the government said Thursday. Income fell 2% in March, with an identical decline in disposable income.
At the same time, spending slumped a record 7.5% last month. The spending data was not a surprise as it was contained in the first quarter GDP report released Wednesday, which showed consumer spending contracted at a 7.6% annual rate in the first quarter.
Inflation pressures eased in March. The closely watched PCE price gauge fell 0.3% in the month led by energy prices, pushing down the increase over the past year to 1.3% from 1.8%. The core PCE price index slipped to a yearly rate of 1.7% from 1.8%.
With spending falling faster than income, the savings rate shot up to 13.1% from 8% in February. That’s the highest rate in 39 years.
Spending declined for services, such as health care, dental and food services. Within goods, the leading decline was spending on autos. Real spending on groceries rose 19.1% in the month.
Wages and salaries fell 3.1% in March, the government said. While unemployment insurance payments soared, to a record high, it was not enough to offset the drop in wages, said David Berson, the chief economist at Nationwide.
(Excerpt) Read more at marketwatch.com ...
FYI - It might also be a good idea to have MULTIPLE bank accounts - that is over multiple ACTUAL banks and keep your money evenly split.
Y’know...
just in case...
That is very good advice. Keep ‘em guessing.
Well, of course. It ain’t as easy to spend money when you’re locked down. Sure, you can shop online, etc., but harder to spend on entertainment, restaurants, haircuts, casinos, etc. when it’s all closed.
What is really amazing in these numbers is that the unemployment rate is 20+%, but wages and salaries are only down 3.1%. Lots of low-end workers being laid off. Of course this is tempered by the fact that the shutdown wasn't in place the entire month and unemployment is still rising.
People quit spending money.
Mom now talks about this. When your situation is not secure, you will stop buying frevulius items you did not have to have. Thus further jobs were lost and snowballed from there.
My discretionary spending outside of regular bills consists of food, booze, the odd item on Amazon and the occasional used book on Ebay. If I have a bit too much to drink while I’m browsing I might go wild and spend over $15 on one book.
Holy cow $15. Big spender.
Hussien said it was our new normal, which is the phrase we hear now on radio and TV eleven years later.
Extending the lockdown will send us into Great Depression II.
Freedom gone, lives destroyed, money means little. Except to help buy anti-depressants, perhaps.
I can’t believe how many are content under tyranny!
Exactly, standing in bread lines.
For many the easy credit will evaporate. Once folks miss 2 or 3 months of bills, bank card limits get reset to current balance...and POOF! No more credit. BTW, this is already starting to happen.
What do YOU miss the most?
Those jobs are gone and they’re never coming back.
i’m saving but the phruck if i’m keeping it in the bank, who restricts how i can access my money and gives me zero interest while it costs them nothing to create money out of thin air to lend via fractional reserve lending policies
...the unemployment rate is 20+%, but wages and salaries are only down 3.1%. Lots of low-end workers being laid off. Of course this is tempered by the fact that the shutdown wasn’t in place the entire month and unemployment is still rising.
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It isn’t structural unemployment, yet. Many employers furloughed workers so they could qualify for government subsidies. When they received the PPP money, those employers were to use that to pay employees,but some employees were unhappy, because the official unemployment contained a bonus.
Some low end hourly workers are probably pulling over 2x their usual weekly salary (and not paying payroll tax) AND a $1200 compensation check. Quite a windfall and that’s for a single person. A couple, especially with children, probably feels like they hit the lottery. If they have half a brain, they are squirreling this money away while practicing extreme frugality.
I’m pretty sure chicken and pork are making it to the stores and people are buying it for the freezer. I don’t think the runs on food pantries are all people with no financial cushion, considering the size of the 1st stage bill. There’s not a lot of confidence in the future right now.
It’s all really too fuzzy to call those numbers hard stats, especially with media touting the numbers in an attempt to pretend we have a ‘normal’, structural Depression.
Just look at how upset the progs are that Trump’s name is on the $1200 checks.
Difference is that people literally cant spend anything almost anywhere.
“Helicopter money” alone will not stimulate the economy if velocity decreases. If velocity is zero (i.e. savings) it’s as if it never happened. At the right time Trump’s job is to increase confidence and get people spending again.
I miss my anger-free moods. And going out with my mom for lunch weekly. Also church.
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