Americans’ Income, Spending Growth Slows
August 30, 2013 by Paul Ausick
Consensus estimates had called for month-over-month growth of 0.2% in personal income and 0.3% in spending.
Some of the details are disheartening. Private wages and salaries fell $15.3 billion in July after an increase of $31.3 billion in June. The impact of federal budget cuts reduced government wages and salaries by $7.7 billion in July, compared with a drop of $700 million in June.
Current taxes decreased by $7.8 billion, after an increase of $11 billion in June. Falling wages and salaries pave the road for lower tax collections.
The personal savings rate was essentially unchanged month-over-month at 4.4%.
The core PCE price index rose 0.1% in July compared with a rise of 0.2% in June. Annualized, that calculates out to an inflation rate of 1.2%, and could be a signal to the Fed to keep the stimulus spending at current levels when the FOMC meets next month. There are many economists and arguments supporting more inflation as a way to boost employment.
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.