Negative Personal Savings Rate The Norm?
From Smartmoney:
Inflation Eats Up Income Gains in April
Rising prices offset the gains in personal incomes in April, the Commerce Department said Friday.
Personal incomes rose 0.5% in the month, but consumer prices also rose 0.5%. Real disposable incomes (inflation-adjusted and after-tax) fell 0.1%.
Real per-capita incomes fell 0.2%.
Consumer spending increased 0.6% in nominal terms. In real, inflation-adjusted terms, spending increased 0.1%, starting the second quarter off on a weak note.
Core inflation -- as measured by the personal consumption expenditure price index, excluding food and energy -- rose 0.2% in April, as expected, after a 0.3% gain in March. Core inflation rose 2.1% in the past 12 months, the fastest gain since March 2005.
The increase in the core PCE index was 0.2497%, which rounded down to 0.2%, barely.
...
With spending rising faster than incomes, the personal-savings rate fell to negative 1.6% in April from negative 1.4% in March. The savings rate has been negative for 11 consecutive months.
Inflation Eats Up Income Gains in April
Rising prices offset the gains in personal incomes in April, the Commerce Department said Friday.
Personal incomes rose 0.5% in the month, but consumer prices also rose 0.5%. Real disposable incomes (inflation-adjusted and after-tax) fell 0.1%.
Real per-capita incomes fell 0.2%.
Consumer spending increased 0.6% in nominal terms. In real, inflation-adjusted terms, spending increased 0.1%, starting the second quarter off on a weak note.
Core inflation -- as measured by the personal consumption expenditure price index, excluding food and energy -- rose 0.2% in April, as expected, after a 0.3% gain in March. Core inflation rose 2.1% in the past 12 months, the fastest gain since March 2005.
The increase in the core PCE index was 0.2497%, which rounded down to 0.2%, barely.
...
With spending rising faster than incomes, the personal-savings rate fell to negative 1.6% in April from negative 1.4% in March. The savings rate has been negative for 11 consecutive months.
9 Comments:
Enjoy the long weekend Holiday at the Jersey Shore !!!
Long Beach Island... home of the Million Dollar Homes !!!
LBI better known as "Paramus South"
A parking lot with sand.
I think we might see some homes being withdrawn from the market. Only the desperate once will be left and those should be squeezed.
10 homes pulled from MLS here in PA by Yardley/Trenton recently in one zip. I notice that a few have gone from MLS to local realtor only.
How could that benefit a seller?
Oh, by the way, despite decline in real earnings, "saving for a house ain't that hard.."
http://money.cnn.com/2006/05/25/magazines/moneymag/down_payment_moneymag_0606/index.htm
I guess if I don't buy my lousy 3 scratch off lottery tickets on Wednesday, we can buy that beachfront house we're waiting for.
I rent, and save $25K a year for downpayment. Gives me the flexibility to buy a $250K house in Middlesex county when real estate prices revert to mean....40% lower from here in the next 2-3 yrs.
Oops..sorry NJResident286 always forget
tinyurl.com/r339c
or
just go to cnn.com, click on business, then real estate.
I wish somebody on CNN money would profile a two income family with one or two kids, $800 to $1000 a month in daycare, etc., and come up with a miracle plan for saving a 25% downpayment around here. We've been brown-baggin' it for 5 years. I'm sick to death of this crap. And my $1.58 lean cuisine lunches.
Totally have turned into a Bob fan.
Anybody have any info or translation for
http://tinyurl.com/nqr37
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
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