Personal Income, Spending Up (Modestly) in November
The U.S. Department of Commerce released data this week on personal income for November, and the numbers look modestly positive, with a 0.4 percent increase in personal income last month. Further, the numbers show that:
- Real disposable personal income rose 0.2 percent
- Wages and salaries increased by $16.1 billion
- Real personal consumption expenditures rose 0.2 percent
- The saving rate remained steady at 4.7 percent
These numbers show a different situation than a year ago, when personal income was on the decline, but many economists have cautioned that they may not be enough cause for celebration. To fully recover from the recession, it seems, more substantial increases are needed.
The Commerce Department also reported this week that consumer spending rose by 0.5 percent (0.2 percent after adjustments for inflation) last month, likely a byproduct of the slight bump in income.
New Home Sales Fall
On a less positive note, data from the Census Bureau show that single-family home sales plummeted last month to 355,000, which represents an 11.3 percent drop from October and the lowest rate in seven months.
The combination of these indicators has some analysts worried about the ability of the U.S. economy to recover in the long term, because consumer spending and real estate are two main economic drivers.
Of course, the numbers could represent a mere blip in the larger recovery, rather than the beginning of a troubling trend.
The Good News
While the numbers for the overall economy may be gloomy, on an individual level, these numbers are somewhat more encouraging: personal savings rates, which dipped into the negatives in recent years (meaning that people were spending more than they earned), have crawled into the positives.
In fact, according to msnbc.com, experts from TransUnion are predicting that Americans will have fewer credit card delinquencies in 2010, following a trend that’s held steady for the last few months of this year.
And, with the enactment of all provisions of the Credit CARD Act in February, consumers may have one more tool in their kit to help them keep on top of credit card payments.
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