Steve Chiotakis: Word today from the Commerce Department that consumer spending was up in September more than half a percent. At the same time, Americans are saving less and aren’t seeing much growth in income.
Jill Schlesinger is editor-at-large at CBS/MoneyWatch, and she’s with us live from New York, as she is every Friday morning. Hey Jill.
Jill Schlesinger: Good morning.
Chiotakis: So it seems like people are spending a little money now — but at the expense of savings. What’s going on?
Schlesinger: Well, that’s actually problematic. You know the personal savings rate dropped to 3.6 percent; it’s the lowest since December of 2007. And yesterday’s GDP report — same trend that we saw. When households increase spending at the expense of saving, it’s just not sustainable, and that makes these results somewhat suspect.
Chiotakis: I know you just mentioned GDP numbers. The third quarter growth in the economy was about right on target — about 2.5 percent. Is that enough growth, Jill, to really create jobs and get the economy going?
Schlesinger: You know that rate is just about the long-term average, but it’s really low for a recovery. To start to see real improvement in the jobs crisis, growth needs to be above 3 percent for a few quarters in a row — you know, versus the herky-jerky results we’ve seen over the past few quarters.
Chiotakis: Which was what, 1.3 percent quarter before?
Schlesinger: And a 0.4 percent the quarter before that.
Chiotakis: Jill Schlesinger from CBS/MoneyWatch. Jill thanks.
Schlesinger: Great to be with you.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.