August 5, 2009
Higher Costs Spur Rise in U.S. Consumer Spending
By JACK HEALY
The broader economy may be testing the bottom, but for American consumers, there appears to be no end yet in sight for falling wages and higher living expenses.
That was the picture painted Tuesday by the government’s monthly report on personal incomes and consumer spending. While consumers spent more in June, they did so because prices of food and energy were rising, and not because they were ready to spend freely again.
Well, so we got it wrong–the market is up and that’s what really counts. Reality is what we make it.
The saving rate is down, wages and working hours are both down, salaries taking a $28 billion hit for the month. But not to worry, Goldman Sachs is riding high again and the house-in-the-Hamptons is safe, after a pretty big scare for the moneyed folks.
Sure glad they ducked that bullet.
“Economists said a strong response to the government’s “cash for clunkers” auto purchase program was likely to lift spending in July.” Bless those darling little economists with their darling little missed forecasts–they just keep on keepin’ on.
If the planned hire out your wife as a maid program kicks off as planned during August and sell off the kids instead of sending them to college takes hold in September, the turnaround may actually find its legs.