Economy: March spending up .8%, inflation up .4%, core up .3%, savings up to negative .3%

[Engineer]

Click me!

People are continuing to spend. With wage increases, people have spent most of it. Adjusted for inflation, spending is up .2%. With the savings rate increasing to a negative .3%, it would seem people are borrowing just a tad less. April should have a much higher CPI as the gasoline prices kick in. Core for April is anyone's guess.

With the core being at the upper end of the so called comfort zone of the fed (2%), I would expect one and maybe "up to" two more rate hikes over the next few FED meetings. With the possibility of April's energy inflation spilling over into the core rate (as business passes on energy costs), the Feds "could" be tightening for a lttle while longer.

Not bad overall but inflation just a tad high (running 4.3+ % for the year)

Consumer Spending Up 0.6 Percent in March
Monday May 1, 9:43 am ET

By Jeannine Aversa, AP Economics Writer

Consumer Spending Rises 0.6 Percent in March As Their Incomes Grow at Fastest Pace in 6 Months


WASHINGTON (AP) -- Consumers spent more freely in March as their incomes grew at the fastest pace in six months, another sign the economy has snapped out of its end-of-year funk.
The Commerce Department reported Monday that consumer spending rose 0.6 percent, an improvement from the 0.2 percent increase registered in February. Consumer spending plays a key role in shaping overall economic activity.

Incomes, the fuel for future spending, advanced by 0.8 percent in March. That was up from a 0.3 percent increase in February and marked the largest gain since September.

Income includes government payments as well as wages. Payments from the new Medicare prescription drug plan had the effect of helping to boost overall income in March. Wages, meanwhile, grew by a moderate 0.4 percent for the second month in a row.

Both the spending and incomes figures were better than economists were expecting. Before the release of the report, they were forecasting spending and income to each rise by 0.4 percent.

The spending and income figures are not adjusted for inflation.

When adjusted for inflation, consumer spending looked more subdued, rising by 0.2 percent in both February and March.

An inflation gauge tied to the consumer spending and income report that is closely watched by the Federal Reserve showed that prices -- excluding energy and food -- went up by 0.3 percent in March, compared with a tiny 0.1 percent increase in February. Over the last 12 months, these "core" prices rose by 2 percent -- considered the upper bound of the Fed's comfort zone for inflation.

The Federal Reserve is expected to boost rates by another quarter percentage point at its next meeting on May 10. That would mark 16th increase since June 2004, when the Fed's rate-raising campaign started.

After May, though, the odds are growing that the Fed may move to the sidelines for awhile to assess how its previous rate increases -- which can take a year or more to work through to work their way through the economy -- are affecting economic activity.

Thus far, the economy is motoring ahead despite climbing interest rates and rising energy prices.

For the first quarter, the economy zipped ahead at a 4.8 percent pace, the fastest growth in 2 1/2 years, the government reported last week. A rebound in consumer spending figured prominently in the strong showing.

In the current April-to-June quarter, economic growth is expected to slow to the 3 percent range, which would still be healthy, as consumers moderate their spending.

With income growth outpacing spending growth, Americans' personal savings rate improved. The personal savings rate -- savings as a percentage of after-tax income -- rose to negative 0.3 percent in March, compared with negative 0.6 percent in February.

Economists, however, caution against reading too much into the savings rate. They say it doesn't provide a complete picture of household's finances because it doesn't capture gains from such things as real estate or financial investments.

 

[Darkhawk28]

From your link (it appears to have been edited a bit)...

An inflation gauge tied to the consumer spending and income report that is closely "watched by the Federal Reserve showed that prices -- excluding energy and food -- went up by 0.3 percent in March, compared with a tiny 0.1 percent increase in February. Over the last 12 months, these "core" prices rose by 2 percent -- considered the upper bound of the Fed's comfort zone for inflation."

0.3% in March doesn't include the nasty gas prices we've been suffering.

 

[dmcowen674]

Originally posted by: Darkhawk28
0.3% in March doesn't include the nasty gas prices we've been suffering.

What are you talking about?

Rush and the rest have been saying how thrilled they are gasoline prices are high enough to be making them a ton of money.

 

[Slew Foot]

Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

 

[ntdz]

Originally posted by: Darkhawk28
From your link (it appears to have been edited a bit)...

An inflation gauge tied to the consumer spending and income report that is closely "watched by the Federal Reserve showed that prices -- excluding energy and food -- went up by 0.3 percent in March, compared with a tiny 0.1 percent increase in February. Over the last 12 months, these "core" prices rose by 2 percent -- considered the upper bound of the Fed's comfort zone for inflation."

0.3% in March doesn't include the nasty gas prices we've been suffering.

Why should they count gas price increases in Q2 for Q1 inflation? They'll count it in Q2...

 

[ntdz]

Originally posted by: Slew Foot
Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

Yeah because rednecks play so many videogames...

 

[charrison]

Originally posted by: ntdz

Originally posted by: Slew Foot
Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

Yeah because rednecks play so many videogames...

And they wonder why they have a hard time capturing the vote in the south...

 

[BaliBabyDoc]

Originally posted by: charrison

Originally posted by: ntdz

Originally posted by: Slew Foot
Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

Yeah because rednecks play so many videogames...

And they wonder why they have a hard time capturing the vote in the south...

Former slave states for Bush is far more than a coincidence. Curiously, the South also has the highest rates of ADD.

 

[charrison]

Originally posted by: BaliBabyDoc

Originally posted by: charrison

Originally posted by: ntdz

Originally posted by: Slew Foot
Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

Yeah because rednecks play so many videogames...

And they wonder why they have a hard time capturing the vote in the south...

Former slave states for Bush is far more than a coincidence. Curiously, the South also has the highest rates of ADD.

Keep it up, republicans are going to have keep relying on such blunders from the left.

 

[zendari]

The economy keeps rolling along.

 

[ntdz]

Originally posted by: BaliBabyDoc

Originally posted by: charrison

Originally posted by: ntdz

Originally posted by: Slew Foot
Not surprised that spending is up as stupid rednecks blow their tax refunds on beer and video games.

Yeah because rednecks play so many videogames...

And they wonder why they have a hard time capturing the vote in the south...

Former slave states for Bush is far more than a coincidence. Curiously, the South also has the highest rates of ADD.

And the South also has a huge black population, very curious...

 

[Slew Foot]

Keep on spending

Geez, gas prices keep rising, interest rates keep rising, but people keep on spending. Tax refund effect or are people actually earning more?