Posted by admin | Posted on 16-04-2012
Category : Business, Stocks
Tags: bed, desperately, income, increase, independent, investor, lowest, months, rebound, small, spending, started, thestreet
The following commentary comes from an independent investor or market observer as part of TheStreet’s guest contributor program, which is separate from the company’s news coverage.
NEW YORK (TheStreet) — Spending increased by 0.8% in February, the most in seven months, but incomes only increased by 0.2%. More importantly, real disposable income declined by 0.1%, the third such decrease in the last four months.
As a consequence, the savings rate fell out of bed to 3.7% from 4.3%, the lowest level since August 2009. Therefore, the small rebound in manufacturing and huge increase in spending by the consumer is ersatz and unsustainable. The problem is that consumer debt has now started to increase once again at a time when it desperately needs to contract.
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Read the rest here: Spending Data Exposes Futility of Money Printing