The gullibility and delusional mindset of the American people cannot be underestimated. Real personal income declined in February, but that didn’t deter Americans from spending at four times the rate of their income. Here is a link to the data.
http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1
It seems that Bernanke, Obama and the MSM have successfully convinced a large swath of zombies to spend money they don’t have – AGAIN. Here are the disgusting facts:
- Real disposable personal income dropped by 0.1% in February while real spending went up by 0.5%.
- Disposable personal income went up $18.9 billion, while we spent $86 billion more.
- In the last year, wages are up $291 billion, while expenditures are up $435 billion. Mass delusion and stupidity abound.
- Hysterically, 17.7% of total personal income is really government transfers to the people, every dollar of which is borrowed from the Chinese so it can be spent buying shit from the Chinese.
- Interest income is the lowest it has been since 2000, as it has fallen by $450 billion since 2007. Those senior citizens were just wasting it on food anyway. Jamie Dimon is putting it to much better use.
- The savings rate has now plunged to 3.7% as Americans have been convinced the future is so bright they’ll have to wear shades. Who needs to save when your Wal-Mart job pays so well and your home price is going up by 10% per year?
This country is so fucked, it isn’t even funny.
Administrator says:
The Federal government transfers $2.34 trillion per year to the FSA and calls it personal income.
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30th March 2012 at 10:13 am
TeresaE says:
Nope, not funny at all.
Went out to dinner last night. Over the past couple months, restaurants – for the most part – have been PACKED on Thursdays. Last night at 6 pm there were spots to spare all over the place, even at Red Lobster. The little Mexican joint we went to was sending staff home – and they said that it was like hitting a wall a couple weeks back, all of a “sudden” sales have fell off a cliff.
Amazing that when wage/income “increases” come from increased employer paid health insurance and temp jobs that it doesn’t equate to more money in consumers’ pockets.
Simply amazing.
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30th March 2012 at 10:18 am
Administrator says:
Posted 2012-03-30 08:47
by Karl Denninger
in Macro Factors Personal Income And Spending – Feb 2012
The Stupid, it burns!
Personal income increased $28.2 billion, or 0.2 percent, and disposable personal income (DPI) increased $18.9 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $86.0 billion, or 0.8 percent. In January, personal income increased $26.5 billion, or 0.2 percent, DPI increased $5.0 billion, or less than 0.1 percent, and PCE increased $40.9 billion, or 0.4 percent, based on revised estimates.
Real disposable income decreased 0.1 percent in February, compared with a decrease of 0.2 percent in January. Real PCE increased 0.5 percent, compared with an increase of 0.2 percent.
Got it?
Real disposable income went down as the cost of living (necessities) went up faster than incomes. But spending increased faster, which means we’re spending more than we make — again.
We are again into the space where people are clawing at the edge of the cliff trying to avoid disaster. It’s not going to work any better than it has in the past.
The result was a drop in the “savings” rate to 3.7% from 4.3% last month, both well below the “reasonable” 5% rate. And this is not actual savings (capital formation) either since debt pay-downs are included in “savings.” In point of fact we have not de-levered to a material degree at all and now it appears that the consumer is getting dangerously close to the “drowning, actively and now” zone, likely driven to a large degree by gas prices.
It is never good when spending is rising faster than earnings folks.
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30th March 2012 at 10:55 am
Administrator says:
American Spending Goes Into Overdrive As Savings Plunge To 2008 Levels
Submitted by Tyler Durden on 03/30/2012 08:44 -0400
Why save when one can spend (and, more importantly, why save when one has ZIRP)? This appears to have been the motto of American consumers in the past three months when the US Savings rate has plunged from 4.7% in December to a tiny 3.7% in February: the lowest since December 2007′s 2.6%, and just as the recession and the market crash was about to send everyone scrambling for the safety of bank savings. The reason: in February personal spending soared by 0.8% on expectations of a 0.6% rise, while incomes barely rose by 0.2% on a consensus rise of 0.4%. Which means the balance had to be savings funded. So even as we have seen retail weakness in the past three months, we now know that it was not only credit funded, but also forced US consumers to burn through their meager savings. And all this before the gasoline price shock hit. The question then is: with the remainder of US savings about to be tapped out on gasoline purchases, just where will the money come to fund all those priced in NEW iPad acquisitions? Or will Apple finally use up its cash hoard and start a captive lending unit, giving consumers credit to purchase its products? At the rate the US consumer is going broke it may soon have no other option.
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30th March 2012 at 10:56 am
Ron says:
Well with all the good news on the tv lately,mabe folks are trying to enjoy themselves before the Obama/mayon end of the world thang happens.
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30th March 2012 at 11:12 am
AWD says:
“The Federal government transfers $2.34 trillion per year to the FSA and calls it personal income.”
$1.6 trillion of which is borrowed.
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30th March 2012 at 12:04 pm
matt says:
It’s a new martini for the TBTF banks. It’s called “the Bernanke” and here is how it is made:
1 part inflation
1 part 0000.2% interest on savings
1 part underwater mortgage, or student loan (either one, or both makes it better)
1 part unemployment
2 parts credit card debt
shake well, pour slowly over American Dream and then light on fire. It’s all the rage!
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30th March 2012 at 12:09 pm