Savings rate rises to 14-year high in January

Discussion in 'Economics' started by ASusilovic, Mar 2, 2009.

  1. WASHINGTON (MarketWatch) -- U.S. households socked away most of the extra income they got in January from annual cost-of-living raises, boosting the personal savings rate to a 14-year high, the Commerce Department said Monday.
    Disposable real incomes rose in January at the fastest pace since May as annual pay raises and cost-of-living increases took effect while taxes plunged 9.3%, the Commerce Department said. Real disposable incomes (adjusted for inflation and after taxes) increased 1.5%, despite the third straight decline in income from wages and salaries. Read the full report.
    Meanwhile, real (inflation-adjusted) consumer spending increased 0.4% in January, the largest increase since November 2007 and only the second increase in the past eight months.
    While the increase isn't likely to signal the bottom in spending, "we will take any good news on the economy these days," said Adam York, an economist for Wachovia.
    Prices increased 0.2% in January, the first increase since September. Core consumer prices -- which strip out food and energy prices to get a better view of underlying inflation -- rose 0.1%. Consumer prices are up 0.7% in the past year, while core prices are up 1.6%.{315493FB-70E7-495E-B8B1-81ADAE646F64}

    Good news.