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Us Consumer Spending Boosted By Rise In Personal Income

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US consumer spending increased by 0.6% in March from February, rising for the ninth straight month, the Department of Commerce said.

This compares with an upwardly revised 0.9% advance in February. It was helped by an increase in personal incomes.

A steady, if unspectacular, fall in the number of people out of work and a 2% cut in social security taxes have helped to buoy consumers.

Adjusted for inflation, spending rose 0.2% in March and 0.5% in February.

However, analysts believe the rising cost of food and higher energy prices are affecting the consumer spending data.

"What we are seeing is that the nominal spending is rising, but the concern is that a large share of income is going to meet higher prices. In real terms, that means consumers have less money to use for spending," said Michelle Meyer, an economist at Bank of America Merrill Lynch

Yipee spending is up again. The spendy spendy recovery is on.

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U.S. consumers increased spending for a ninth straight month in March as they stretched to cover higher costs for food and gasoline, with inflation posting its biggest year-on-year gain in 10 months.

Despite the rising cost of living, Americans grew a bit more optimistic about the economy this month and even dialled down their expectations for inflation over the medium-to-long term, another report showed on Friday.

Consumers appear to be taking the high costs in stride, but could be put to the test if gasoline prices shoot above $4 a gallon. The national price for regular unleaded gasoline rose 3.5 cents to $3.88 in the week through Monday.

Still at least they are spending...

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Don't know where I saw it, but deleveraging is taking place in the US but it is forced deleveraging. If you take out foreclosures then there has been no reduction in debt. I take this to mean that the credit bubble still has legs and with employment improving, ever so slightly, the economy might continue to levitate for a few more quarters.

The PMI data in the US seems to have topped, though, so the next decline may be sudden.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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