Filed under: Personal finance, Recession
In another nod to a slowing economy, consumer spending slowed in January, while income growth sputtered as well. The Wall Street Journal reported recently (subscription required) that the Commerce Department said “personal spending rose 0.4%, but was unchanged after adjusting for inflation. Such spending was also flat in December and October.”
It seems to be a perfect storm of sorts. Consumers are cutting spending as they face dropping home prices, high energy prices, tightening credit markets, and a more limited job market.
As consumers spend less, they may be forced to dip into the proverbial cookie jar and start spending rainy-day savings. The same article said, “Rising prices may be prompting consumers to dip into their savings. The personal saving rate fell 0.1% in January, repeating December’s performance.”
While economists and politicians debate whether the U.S. has dipped into a recession, consumers are already feeling the pinch.
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
Permalink | Email this | Comments
