|
News
-
Financial News
|
Personal income rose 0.1% in November, the Commerce Department said Friday. Excluding inflation and taxes, it was flat. Wages and salaries fell 0.1%.Countering other data signaling a strong start to holiday shopping, personal spending rose just 0.1% for a second straight month."Consumers can't lead the economy," said Robert Dye, chief economist at Comerica. "They can keep pace with the economy."With personal incomes basically flat, consumers have saved less to spend more. The savings rate slid to 3.5% in November from 3.6% in October and 5% in June.Dye doesn't see the savings rate going much lower, if at all. Additional spending gains will likely track how much the overall economy expands, he added.U.S. GDP may expand around 3.5% in Q4 after rising at less than a 2% annual rate in each of the first three quarters. But the pace is seen slackening again in 2012. [Read the full article]
Thursday's reports on pending-home sales, jobless claims and Midwest manufacturing add to evidence to a strong finish to 2011. But most analysts say the current strong patch will give way to another sluggish year."It's not going to look all that different," said Tom Porcelli, chief U.S. economist at RBC Capital Markets. "It's better than the alternative."He expects the U.S. economy to expand 1.7% in 2012 vs. a rough consensus of 2%. Growth of 2% or less likely would mean unemployment wouldn't come down significantly. The recent drop to 8.6% was partly due to people leaving the labor market.Americans have been spending more, but largely by saving less. Given that incomes have been flat, recent spending gains won't last unless Americans stop saving altogether.Meanwhile, Europe is teetering toward recession as the debt crisis and austerity measures intensify. And that's a best-case scenario. [Read the full article]
|
