The Consumer Appears Taped Out As Income Dropped By The Most In 20 Years…At The Same Time A Trap Door Just Opened, Taking The Savings Rate Back To 2007 Levels

Posted By on March 1, 2013

How do we define austerity?  Quit simply we think it means that out into the future… “we’re all going to be poorer”.

This sets up a bad game, and looking at the view of the field, it really doesn’t look anything like the ticket they sold us……more specifically, we have  “bad seats, hey buddy…front row behind a pole, and we just sat on a nail!”

The US consumer gave back all the December gains and then much following news that while spending did nothing, and came in as expected at 0.2%, personal income imploded by 3.6% on estimates of a modest 2.4% drop. This was the biggest drop in personal income in 20 years  just as the US consumer’s confidence was soaring at least according to UMich data.

The personal saving rate, which crashed from 6.4% to 2.4%, the lowest since November 2007, and leaving Americans with the least purchasing power just as the full impact of a government that is flirting with austerity is starting to be felt. And just as bad was the material 4% pullback in real disposable personal income which is adjusted for inflation.

www.zerohedge.com

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