Consumer Spending Hits Two-Year High

[CShine]

Consumers — the lifeblood of the economy — boosted their spending in May by the largest amount in more than two years, an encouraging sign for the recovery's strength. The Commerce Department reported Monday that consumer spending rose by a sizable 1 percent, a considerable pickup from the 0.2 percent increase registered in April. The increase in May was the largest since October 2001, when spending rebounded with gusto after being depressed by the Sept. 11 terror attacks.

Americans' incomes, meanwhile, went up by a strong 0.6 percent in May for the second straight month. The growth in incomes in the last two months was especially heartening because that powers spending in the future. The income and spending figures are not adjusted for price changes. Consumer spending accounts for roughly two-thirds of all economic activity in the United States. Thus, it plays a key role in shaping an economic recovery.

The latest snapshot of consumer behavior was better than economists were expecting. They were forecasting a 0.8 percent increase in spending and a 0.5 percent rise in income growth. When the spending figures are adjusted for inflation, consumer spending rose by a more modest 0.4 percent in May after being flat in April.

With the recovery firmly rooted and jobs picking up, economists widely expect the Federal Reserve to on Wednesday to boost short-term interest rates for the first time in four years. Most are forecasting a one-quarter percentage point increase in a key interest rate, which now sits at a 46-year low of 1 percent.

http://story.news.yahoo.com/news?tmpl=story&ncid=&e=4&u=/ap/20040628/ap_on_bi_go_ec_fi/economy

[slackmaster]

1. This must be my fault

I just landed a new job and went on a major shopping spree yesterday.

Sorry if I skewed the stats.

[hadrons]

2. spending all that $$$ on higher gas prices .....

[Danmack]

3. Will someone remind me again why we should believe anything...

that this commerce department puts out.

First thing I do whenever these assholes put out great news is to look around at what is going on and what is missing.

Well....

1. What ever happened to the UE report last week or the week before. Not a peep. Must not have been good news for the creeps.

2. Interest rates are going up this week so they fudged some numbers early to get the boost to the market so when it dives after the rise it won't look so bad.

3. Anything to take the focus off MM and F911.

These just for starters.

Its easy folks. All you have to do is ask yourself "why would Rove want this to come out now?"

I wish we had the ratio of how many times the commerce dept. revised numbers down vs up.

I look forward to a Kerry WH reviewing all these numbers and setting the record straight after he is sworn in next Jan

Remember these folks will lie, cheat and steal to retain the WH in Nov.

[F.Gordon]

4. Why does "economic news" have to be "spun"

Consumer Spending Hits Two Year High

The "Headline" gives the impression that consumers are spending more than have in the last two years, but the "statistics" only represent a month to month increase. It's only comparing May to April of this year. The May statistics don't put the April statistics in their true light. It's kinda' like saying someone in the Hospital has been upgraded from critical condition to serious condition. That would certainly be good news, but it doesn't reflect the true health of the "patient".

and With the recovery firmly rooted and jobs picking up

This is an op/ed statement and has no place in a "news story".

Sometimes I start to doubt my own perspective of the economy. Maybe I'm just being pessimistic? Maybe all those small businesses I've seen shut over the last 6 months in my area are just a fluke. An anomaly. And I keep asking myself...."if the economy is doing so well why do we have to be kept being TOLD that it's doing so fantastic?" Wouldn't we know that?

Nearly all of the gain in nondurable spending was due to inflation, with spending in real terms rising 0.1 percent.

[jayfish]

5. And The Key Line Of The Article Is...

"When the spending figures are adjusted for inflation, consumer spending rose by a more modest 0.4 percent in May after being flat in April. "

Of course a person is going to spend more money if they have to pay more for everything. Is it just me or does anyone else think that American news media needs to be dissolved and started from scratch.

Jay