Thrift is in
Consumer didn’t spend anywhere near with abandon over the holiday season. Considering how harsh the last couple of years have been on so many people, from young adults seeking their first full-time job to retirees watching their pension values slide, it’s hardly suprising that thrift remains the thing to do — or strive for, at least.
Incomes did improve during December, but the latest government data shows people decided to save the money rather than spend it. Personal income rose by 0.5 percent compared to November, according to the Commerce Department. Spending was flat. The personal saving rate — personal saving as a percentage of disposable income — was 4 percent in December, compared with 3.5 percent in November.
Households still have further to go on the savings front, but in the recent past, the personal savings rate has been higher than it was for much of the housing bubble years. It isn’t easy to save when incomes are stagnant and nearly 24 million Americans are unemployed, under-employed or marginally attached to the workforce (and that’s before including those who have given up looking for work).
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