“Our calculations suggest that nearly all the rise in nominal personal spending in April was due to higher prices,” Paul Ashworth of Capital Economics wrote in a report, “with consumption barely rising in real terms.” No wonder: Unemployment is still high, home prices are falling and federal stimulus like the payroll-tax cut will soon fade. And households are still using income to pay down unsustainably high levels of debt.
“The household balance sheet is still a bit of a mess,” Mr. Ashworth says.
Read it all.
(WSJ) The 'Real' Truth About Consumer Spending
“Our calculations suggest that nearly all the rise in nominal personal spending in April was due to higher prices,” Paul Ashworth of Capital Economics wrote in a report, “with consumption barely rising in real terms.” No wonder: Unemployment is still high, home prices are falling and federal stimulus like the payroll-tax cut will soon fade. And households are still using income to pay down unsustainably high levels of debt.
“The household balance sheet is still a bit of a mess,” Mr. Ashworth says.
Read it all.