SAVINGS RATE AT RECORD LOW; CONSUMER SPENDING INCREASES 0.4 PERCENT.
Byline: Jeannine Aversa Aversa (ävĕr`sä), city (1991 pop. 54,032), Campania, S Italy. It is an agricultural and transportation center, noted for its sparkling white wine. It also produces shoes, mozzarella cheese, and other dairy and agricultural products. Associated Press Associated Press: see news agency.
Associated Press (AP)
Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world.
Money is burning a hole in Americans' pockets. Once again, consumers in April spent nearly as much as they earned, helping to push the nation's savings rate Savings rate
Personal savings as a percentage of disposable personal income. to an all-time low.
Spending climbed 0.4 percent last month, a tad lower than the 0.5 percent increase in Americans' personal income, the Commerce Department reported Friday. The income figure includes wages, interest and government benefits.
``You can't underestimate the hedonism hedonism (hē`dənĭz'əm) [Gr.,=pleasure], the doctrine that holds that pleasure is the highest good. Ancient hedonism expressed itself in two ways: the cruder form was that proposed by Aristippus and the early Cyrenaics, who believed of the American consumer,'' said economist Mark Zandi of Regional Financial Associates in West Chester West Chester, borough (1990 pop. 18,041), seat of Chester co., SE Pa., W of Philadelphia; inc. 1799. Primarily residential, West Chester was long the trade and processing center for an agricultural region that is now mainly suburbs. , Pa. ``But consumers have good reason to be out there spending. They've got jobs, their incomes are rising, confidence is high and the stock market is booming.''
So far this year, Americans are spending more than they earned.
Spending in March rose 0.5 percent, while income increased 0.3 percent. In February, spending went up 0.8 percent and income climbed 0.5 percent. In January, the increase in spending matched the increase in income at 0.6 percent.
That trend dragged down the savings rate - savings as a percentage of after-tax income - to a record low of minus 0.7 percent in April. Savings have now been in negative territory for five of the past six months.
Consumers are trying to maintain their lavish spending habits by dipping into their savings once again, analysts said.
Consumers' spending spree Noun 1. spending spree - a brief period of extravagant spending
spree, fling - a brief indulgence of your impulses helped keep the U.S. economy growing at a robust, 4.1 percent annual rate during the first three months of this year, despite economic turmoil elsewhere around the globe.
Americans are enjoying the lowest unemployment rate in nearly three decades, and high demand for labor - even labor shortages A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. in some regions and industries such as construction - is helping to boost wages. In April, wages rose 0.6 percent, after increasing 0.2 percent in March.
Continuing stock market gains and other profits also are lining many people's pockets.