BBC: Wage Rises Spark US Spending Jump
“Rising incomes allowed Americans to spend more in April.”
It’s always interesting to read analysis from a foreign perspective. The BBC reported on Friday that “US spending grew at it’s fastest rate for 3 months as US workers brought home more money.”
The article noted that a .5% increase in incomes fueled the .6% increase in spending that it termed “a spending rush.”
The article also points out that core inflation rose by only .2% but admitted that once food and fuel were included overall inflation rose by .5%.
The obvious explanation is that both food and fuel are relatively inelastic and that .4% of the increase in spending was pretty much unavoidable. What about the other .2% increase in spending? How about rising interest rates, upwardly adjusting ARMs and a deflating dollar?
This entry was posted on Tuesday, May 30th, 2006 at 1:36 am and is tagged with core inflation, rising interest rates, food and fuel, incomes, bbc, rush, perspective, money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback.
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