Monday, March 29, 2010

The February snow didn't stop you from spending....

That's the take-away from today's Consumer Income/Spending report. Incomes remained relatively flat but spending jumped again in February and the savings rate fell again.

"Personal income increased $1.2 billion, or less than 0.1 percent ... Personal consumption expenditures (PCE) increased $34.7 billion, or 0.3 percent.

Personal saving as a percentage of disposable personal income was 3.1 percent in February, compared with 3.4 percent in January."

I'm always looking for the drivers of these moves and I suspect that some of the tax credits this year boosted tax refunds for lower and middle class families. These tend to be the first filers of the tax returns and many of them claimed refunds in February. Lower and middle class families also tend to spend a greater proportion of their refunds. This is mostly anecdotal, but I'd suggest that this had an impact in February.

The guy that showed up at my house with a car in tow that he bought in the am and cash to buy my ATV seemed to fit that demographic.

The economic "recovery" story can only go on so long when incomes are flat and we're again spending our way to oblivion.

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Don't you just hate it when your brand new $2,500 car bursts into flames as you drive it off the lot?

"Software engineer Satish Sawant, his wife and 5-year-old son escaped from the silver Tata Nano -- which still bore a celebratory garland of marigolds on the front hood -- before the tiny car was engulfed by fire.

A chauffeur initially was at the wheel, but Sawant said he had taken over driving before the fire broke out."

You have to love a country where you can afford a chauffeur to drive your $2,500 death tr... I mean, dream car.

"It has as few moving parts as possible. There's only one windshield wiper, one side mirror and the headrests aren't adjustable. The dinner-plate-sized wheels have three bolts rather than four. The tiny trunk doesn't open; you access it from the inside, behind the rear seats."

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