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I’m having trouble squaring the claims in this editorial with the following fact from the Personal Spending data; > Personal saving was $1.03 trillion in March

by zaroth 8y ago

I’m having trouble squaring the claims in this editorial with the following fact from the Personal Spending data; > Personal saving was $1.03 trillion in March, and the personal saving rate, personal saving as a percentage of disposable personal income, was 6.5 percent. That seems incredibly robust considering negative personal savings rates of the past. Increased personal spending is the best sign we have that consumers are not struggling. Up is down?

umeshunni 8y ago
Interesting observation. I suspect it's question of definitions - "persons" are doing well, but "consumers" are struggling? A consumer by definition is not a person who saves, but a person who consumes.
allmaypar 8y ago
I think the author is cherry-picking numbers to support her thesis. In any case, here are some opposing views: U.S. consumer spending surged 0.9 percent in March, the biggest gain in nearly a decade, as inflation pressures remain non-existent. The March gain in US consumer spending was the biggest monthly increase since August 2009, the Commerce Department reported April 29. while inflation rose just 0.2 percent and has risen only 1.5 percent over the past 12 months. http://www.alaskajournal.com/2019-05-01/us-consumer-spending-surges-09-percent-march http://www.alaskajournal.com/2019-05-01/us-consumer-spending... Average hourly earnings in April were 3.2 percent higher than a year earlier, the ninth straight month in which growth topped 3 percent, the Labor Department https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html https://www.nytimes.com/2019/05/02/business/economy/wage-gro...
- zaroth 8y ago
  Here's an interesting observation on MarketWatch; > Income was subdued. The slight 0.1% gain in March follows a 0.2% gain in February and a 0.1% fall in January. Year over year, personal income is up 3.8%, moderate by historical standards. Disposable income was flat in March. > The weakness in income was concentrated in proprietors’ income. Wages and salaries rose 0.4% in March after a 0.3% gain in the prior month. It makes sense that strong job growth at lower incomes, and low-income wage growth, would squeeze proprietors' profit margins, but if it were merely redistributing income, wouldn't the overall rate stay the same? EDIT: I think if you look at Table 1 in the full report it gives better context. [1] [1] - https://www.bea.gov/system/files/2019-04/pi0319_0.pdf https://www.bea.gov/system/files/2019-04/pi0319_0.pdf
nevrthepfhor 8y ago
Savings rates in China are astronomical in comparison. RIP

by zaroth 8y ago

umeshunni 8y ago

Interesting observation. I suspect it's question of definitions - "persons" are doing well, but "consumers" are struggling? A consumer by definition is not a person who saves, but a person who consumes.

allmaypar 8y ago

I think the author is cherry-picking numbers to support her thesis. In any case, here are some opposing views: U.S. consumer spending surged 0.9 percent in March, the biggest gain in nearly a decade, as inflation pressures remain non-existent. The March gain in US consumer spending was the biggest monthly increase since August 2009, the Commerce Department reported April 29. while inflation rose just 0.2 percent and has risen only 1.5 percent over the past 12 months. http://www.alaskajournal.com/2019-05-01/us-consumer-spending-surges-09-percent-march http://www.alaskajournal.com/2019-05-01/us-consumer-spending... Average hourly earnings in April were 3.2 percent higher than a year earlier, the ninth straight month in which growth topped 3 percent, the Labor Department https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html https://www.nytimes.com/2019/05/02/business/economy/wage-gro...

zaroth 8y ago
Here's an interesting observation on MarketWatch; > Income was subdued. The slight 0.1% gain in March follows a 0.2% gain in February and a 0.1% fall in January. Year over year, personal income is up 3.8%, moderate by historical standards. Disposable income was flat in March. > The weakness in income was concentrated in proprietors’ income. Wages and salaries rose 0.4% in March after a 0.3% gain in the prior month. It makes sense that strong job growth at lower incomes, and low-income wage growth, would squeeze proprietors' profit margins, but if it were merely redistributing income, wouldn't the overall rate stay the same? EDIT: I think if you look at Table 1 in the full report it gives better context. [1] [1] - https://www.bea.gov/system/files/2019-04/pi0319_0.pdf https://www.bea.gov/system/files/2019-04/pi0319_0.pdf

nevrthepfhor 8y ago

Savings rates in China are astronomical in comparison. RIP