Wednesday, September 28, 2011

Consumer Spending Still Precarious

A report released yesterday from the Bureau of Labor Statistics helped to point up why our economic slowdown has been so difficult to recover from. According to the BLS, household income in 2010 dropped slightly, by 0.6 percent, from $62,857 to $62,481.

A decrease of around $400 per household shouldn't have a dramatic effect on the economy - except the drop in spending was worse than that. The average American household spent 2 percent less than it had in 2009, and that was coming off a spending drop of 2.8 percent from 2008.

That's why the consumer confidence numbers are so important. We've seen declines in consumer spending not just because Americans have less money, but because they're more reluctant to spend the money they do have. The Conference Board reported yesterday that consumer confidence was ever-so-slightly higher in September, posting a "marginal gain"; that's a good first step.

No comments:

Post a Comment