Incomes on the Rise

There was a report out yesterday from the Commerce Department showing that American household income increased during May. Incomes were up by a wide enough margin that both total spending and total savings were able to increase during the month. Personal consumption had been flat in April, so it's nice to see that it edged upward in May.

This comes on the heels of Friday's report that business investment was picking up, with orders for goods like computers and machinery were up by 0.9 percent in May. The question is, if business is spending all this money, and people are making more money, why isn't it showing up in the unemployment figures?

It may be that, even though the numbers are positive, they're not strongly positive. Personal consumption rose by a minuscule 0.2 percent in May, which looks good in the context of some other recent figures but isn't exactly robust. And, as we noted, the increase in income was split between spending and savings, meaning it wasn't able to make much of an appreciable difference in either area. The numbers are moving in the right direction; the next step is for them to move with enough strength to help the economy get rolling again.