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U.S. incomes see largest drop in 20 years

Posted By yihan On March 1, 2013 @ 12:14 pm In Money Watch | Comments Disabled

Reuters [1]
March 1, 2013

U.S. consumer spending rose in January as Americans spent more on services, with savings providing a cushion after income recorded its biggest drop in 20 years.
Income tumbled 3.6 percent, the largest drop since January 1993. Part of the decline was payback for a 2.6 percent surge in December as businesses, anxious about higher taxes, rushed to pay dividends and bonuses before the new year.

A portion of the drop in January also reflected the tax hikes. The income at the disposal of households after inflation and taxes plunged a 4.0 percent in January after advancing 2.7 percent in December.
The Commerce Department said on Friday consumer spending increased 0.2 percent in January after a revised 0.1 percent rise the prior month. Spending had previously been estimated to have increased 0.2 percent in December.

January’s increase was in line with economists’ expectations. Spending accounts for about 70 percent of U.S. economic activity and when adjusted for inflation, it gained 0.1 percent after a similar increase in December.

Full story here. [1]

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URLs in this post:

[1] Reuters: http://www.chicagotribune.com/business/breaking/chi-us-incomes-see-largest-drop-in-20-years-20130301,0,6102470.story

[2] Retail sales see longest decline in 16 years: http://www.prisonplanet.com/retail-sales-see-longest-decline-in-16-years.html

[3] December Retail Sales Drop .3 Percent, 2009 Sales See Biggest Drop In 27 Years: http://www.prisonplanet.com/december-retail-sales-drop-3-percent-2009-sales-see-biggest-drop-in-27-years.html

[4] US incomes ‘fell more after than during recession’: http://www.prisonplanet.com/us-incomes-fell-more-after-than-during-recession.html

[5] 120 Days to Go Until the Largest Tax Hikes in History: http://www.prisonplanet.com/120-days-to-go-until-the-largest-tax-hikes-in-history.html

[6] 169,000 Americans Drop Out of Labor Force in January As Unemployment Ticks Up: http://www.prisonplanet.com/169000-americans-drop-out-of-labor-force-in-january-as-unemployment-ticks-up.html

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