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Real Personal Spending Crashes Most Since 2009

The silver lining of a rise in incomes (+0.4% MoM vs +0.3% exp) was dashed by a disappointingly slow growth in spending (+0.2% vs +0.5% prev).

 

And the savings rate ticked up – disappointing for The Fed…

The increase in personal income was almost entirely from service-producing industries wages, which increased by $22.5BN, while Goods-producing was higher by just $4 billion.

Notably, Social Security transfer benefits added another $9 billion.

However, for the ‘average joe’, facing a rising cost of goods, real personal spending plunged 0.3% in January – the biggest drop since September 2009.

 

Pushing real annual growth in disposable income to its weakest in over 3 years…

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