American households cut spending and saw income stagnate in September, despite a massive government stimulus program propping up their bank accounts.
Personal disposable income decreased 0.1 percent, after adjusting for inflation, the Commerce Department reported Friday. Personal spending fell 0.5 percent, after four months of gains.
The hit to household bank accounts would have been worse without the massive federal stimulus program designed to prop up economic activity. The nation’s inflation-adjusted personal income has been sloping downward during 2009, when government transfer payments are subtracted out. But including the transfer payments – which have risen because of the stimulus efforts since February – total personal income is about where it stood early in the year. (more)
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