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.