Household Income Rises, Yet Nobody's Spending


By Donald Applegarth

U.S. Income Rises, Yet Spending Remains Flat as Consumers Increase Savings

The consumer spending rebound that many anticipated would begin in April continues to be somewhat AWOL. Many economists expected April to ring in a Spring of increased consumer spending, particularly after a brutal winter adversely impacted shopping in the first quarter. However, recent data suggests that households remain reluctant to spend freely despite healthy gains in income, as well as gas prices that remain notably lower than this time last year. The Commerce Department indicated that consumer spending was flat in April, which is the weakest reading in three months (after March’s numbers were revised to reflect an additional .5% increase). Personal income showed a healthy .4% increase. The net impact of an increase in income and flat consumer spending, the personal savings rate jumped to 5.6% - the second highest level since December 2012. Are consumers tucking dollars away for major expenditures, or simple changing their savings plan in anticipation of a slower economy? The answer may be found in numbers for May and June, and we’ll continue to monitor them.

Contact us with any questions regarding spending habits or visit the Schneider Downs Our Thoughts On blog to read other insights regarding the retail industry.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.