Posts Tagged ‘personal finance’

The Commerce Department says personal income in May rose 1.4%, the biggest gain so far in the year. The rise in income didn’t translate fully into spending. Consumer spending rose only 0.3% in May, a rise for the first time in the last 3 months while savings rate jumped to 6.9%, the highest since December 1993. “Consumers are starting to return to malls to spend a little more as they think we’re through the worst,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi.

Analysts believe a sustained recovery in consumer spending is likely only after unemployment eases. “The recession is ending. Still, purchases are likely to be modest until the job losses ease and companies start hiring,” said Rupkey. Increasing job losses led to 0.1% drop in salaries in May. Retailers believe consumer spending will not rise to any significant extent in the near-term. David Dillon, Chief Executive Officer of Kroger Company, a grocery chain, said: “Shoppers remain cautious in this economy, and we do not anticipate that changing anytime soon.”