When all you read is gloom, turn here for a much different perspective.

Monday, June 28, 2010

Consumers Score Another 2010 Trifecta

Income, Spending, and Saving All Grow in May

According to the Bureau of Economic Analysis the month of May provided a triplet of economic good news -- personal income, spending, and savings all grew. Furthermore, income grew even greater than consumer expenditures and consequently, savings grew as well.

All three measures added similar gains in March of this year.

Personal income has remained fairly stable over the past three months, growing between 0.4% and 0.5%. Over the same period, disposable income has averaged about 0.5% growth. For consumers to be able to spend more on discretionary purchases, their disposable income must of course increase.

Spending has been less stable, recently. In February and March we finally saw spending growth increasing, after the recessionary downward trend of 2009.   The first uptick however post-recession had consumers increasing spend without as much additional income, which meant shoppers were relying more on credit to spend and saving less. In April, however, that changed. Spending was constant, while income continued to grow. And in May? We're now seeing an even better reading: more income growth, but with some additional spending as well.


  1. What do you think it will take to calm the markets down and start on upward trend again?

  2. There is wild speculation on the street about where the labor market is going... Nonfarm payroll employment in May surged 431,000, following a 290,000 boost in April, and a 208,000 gain in March. But according to the BLS, Census hiring added 411,000 temporary jobs to the payroll gain in May leaving private nonfarm employment increasing by only 41,000, following the nonfarm 218,000 boost in April... the range of estimates for the release this Friday is all the way from negative 165K to positive 431K. If the results are positive with an upward revision to the May estimates, it will go a long way to calming the jitters about a slowdown to the recovery.

  3. Are we still following that upward job growth chart that you have published awhile back?

  4. Yes, check the article here:

    It also contains the links to the charts that we've published earlier in the year as well as earlier last year.

    That positive trend line appears to be accurate. we'll publish an update to that chart once Friday's numbers are released.


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