Consumer spending up, income posts largest drop in 20 years

[Redfairen]

Source: Reuters

U.S. consumer spending rose in January as Americans spent more on services, with savings providing a cushion after income recorded its biggest drop in 20 years.

The Commerce Department said on Friday consumer spending increased 0.2 percent in January after a revised 0.1 percent rise the prior month. Spending had previously been estimated to have increased 0.2 percent in December.

.......

Income tumbled 3.6 percent, the largest drop since January 1993. Part of the decline was payback for a 2.6 percent surge in December as businesses, anxious about higher taxes, rushed to pay dividends and bonuses before the new year.

A portion of the drop in January also reflected the tax hikes. The income at the disposal of households after inflation and taxes plunged a 4.0 percent in January after advancing 2.7 percent in December.




Read more: http://www.reuters.com/article/2013/03/01/us-consumer-spending-idUSBRE9200K520130301

[question everything]

1. Interesting that spending is up after the dire warning resulting of paroll tax

rollback. Since our economy is service based, consumption, unfortunately, is an important for a growing economy.

Sigh.

[fasttense]

2. Considering the fact that inflation is up,

even though our federal government chooses to pretend otherwise, I'm surprised spending isn't higher.

A 20 year low in income decrease. That austerity can make everything good bad again.