Monday, March 2, 2015

Why are Americans spending less?

According to the US Bureau of Economic Analysis, personal income increased $50.8 billion, or 0.3 percent, and disposable personal income (DPI) increased $52.6 billion, or 0.4 percent, in January. Personal consumption expenditures (PCE) decreased $18.9 billion, or 0.2 percent.

Despite the increase in income, Americans have been spending less. So obviously they are saving. Why is it that  Americans saving and not spending? Is this because they feel that they are not sure of the tomorrow? Or is it that with the memories of the Great recession, the American consumer has become circumspect. Is there a savings ratchet for the American consumer before he starts spending.
But ultimately what is saved has to be saved or invested. Good in the medium term.

The  news appears to be US dollar and interest rate pessimistic.

Without any risk or responsibility

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