Good news everyone! Spending recklessly, the only thing that seems to keep the American economic engine going, is up. And this comes despite the fact that you all have no money, or even more no money, than you did before you started spending recklessly again:
Consumer spending in the U.S. rose in January even as incomes dropped by the most in 20 years, showing households were weathering the payroll-tax increase by socking away less money in the bank.
Household purchases, which account for about 70 percent of the economy, climbed 0.2 percent after a 0.1 percent gain the prior month, a Commerce Department report showed today in Washington. The median estimate in a Bloomberg survey of 76 economists called for a 0.2 percent advance.
Yes, we are all handling our less-money situation by creating an even more-less-money situation. But don’t worry, it’s not just the payroll tax.
Incomes slumped 3.6 percent, sending the saving rate down to the lowest level since November 2007.
This is coupled with the stupendous news coming out of the Times, which says that despite all those Benjamins we’re dropping, corporations are simply hoarding the cash instead of what they used to do, which is make jobs instead.
With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.
“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”
So while Republicans in Washington continue to rail about “jobcreators!” and the whatnot, America continues to be the Best Greatest Nation Ever Of All Time. Our “recovery” is going swell.
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