I am a big believer in saving money. Whether it is for a rainy day, retirement, buying a home, or for a vacation. I always use 10% as minimum guide for saving. But at this point in time we need a whole lot less saving and a whole lot of spending and it looks like we are beginning to do just that.
A Government report shows spending by individuals rises for the second month in a row even as incomes fall.
CNNMoney.com reports consumer spending rose in February, rebounding for the second month in row after falling for six straight months, according to government figures released Friday.
The Commerce Department said spending by individuals rose 0.2%, after increasing a revised 1.0% in January. February's results were in line with a forecast from Economists surveyed by Briefing.com.
"It appears the majority of the declines in consumption for this cycle are behind us," Adam York, an economists as Wachovia Economics Group, wrote in a client note.
February's spending uptick came as the Commerce Department reported personal income fell 0.2%. Income rose 0.4% in January, but last month's decline marks a return to the recent downward trend as unemployment has risen.
The report also showed that personal savings declined $27.4 billion in February to $450.7 billion. The personal savings rate, expressed as a percentage of disposable personal income, fell to 4.2% from 4.4 % in January.
"The personal saving rate remains near recent highs, as consumers attempt to rebuild their damaged balance sheets," said York. "However, weaker income growth is offsetting slower spending."
If you still have a job and your income hasn't changed keep spending. It's the only way we are getting out of the hole.
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