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Personal Income and Spending Dwarfed by Personal Savings

The Commerce Department’s Personal Income and Consumer Spending numbers have been released for May 2009 and the numbers were +1.4% on Personal Income and Consumer Spending was Up +0.3%.  The income portion was significantly better as Bloomberg had a consensus…

By Douglas A. McIntyre
Published June 26, 2009, 7:38am ET · 1 min read

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The Commerce Department’s Personal Income and Consumer Spending numbers have been released for May 2009 and the numbers were +1.4% on Personal Income and Consumer Spending was Up +0.3%.  The income portion was significantly better as Bloomberg had a consensus estimate of +0.4% on income and +0.3% on spending.  The prior report for April was +0.5% on income and -0.1% on spending, but these were revise3d to +0.7% on income and unchanged or flat on spending. The Core PCE was listed as +0.1% and estimates were +0.1%.  These are surprises, but the personal savings are the largest surprise here.

Personal savings as a percentage of disposable personal income was listed as 6.9% during the month of May. That number looks to be the highest in the last decade.

This is a constant dilemma for what is best for the individual versus what is best for the economy.  Higher spending is healthy for the economy.  But more savings is healthy for the individual.  As long as times are tough and the future is uncertain for many individuals, those who can save are likely to continue saving.

Jon C. Ogg
June 26, 2009

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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