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Consumer spending is up… but wait!

The Bureau of Economic Anaylsis reported today that consumer spending went up by 0.5% in January.

Hey, that’s good right? We know that a large part of GDP — gross domestic product, basically the worth of a country– is comprised of consumer expenditure.

But before we get all excited, the BEA also reports that personal income, on the other hand, went down by 0.1%.

Even worse? Disposable personal income — the income we have left for necessities — went down by 0.4 %.

Okay, so that’s even worse than I thought. Uh-oh. Uh-oh indeed.

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  • BDO

    Why do we do that to ourselves? No matter what perspective we talk about, citizens continue to spend more than they make. How is that sustainable?

    Keep up the good work,
    –Eric