Consumers Get A Nice Bump In Income But Keep Wallets Tightly Closed

The good news is we’re having a nice little boost in income, according to a government report, but we’re not taking that cash and spending it in stores. Perhaps we’re still a bit nervous about splashing out and spoiling ourselves in light of all the economic anxieties facing consumers out there. And we get it — the thought of buying a new computer makes me a lot more nervous than having to constantly perform technological CPR on an ancient one.

The Commerce Department said today that income rose by 0.5%, which is the best increase we’ve had on paychecks since March. It also means we’re up 3.5% over a year ago in June, and is also twice the pace of increases in prices over the last year as well, notes CNNMoney.

Despite that extra cash, consumer spending isn’t budging a bit, and is in fact down 0.1%. Making more money helps the economy, but if we’re not going out and spending it, it could slow economic growth overall.

Consumer spending is more than two-thirds of the nation’s economic activity, which basically makes us star players in our own economic game. Lingering worries over things like gas prices going up again or just not having enough savings in case of another economic downturn could be keeping our wallets closed.

Spending flat despite jump in income [CNNMoney]

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  1. There's room to move as a fry cook says:

    A nice jump in income? Not here.

  2. polishhillbilly says:

    Who got a bump in income? I sure didn’t get one, haven’t had one on 3 years.

    • Loias supports harsher punishments against corporations says:

      The bump for CEOs is bringing up the average.

      • Mambru says:

        Thank Duke energy for this, after that guy made a cool 20 mill in 20 minutes, that defenitely raised the hourly rate of poor missunderstood CEO’s

  3. awesome anna says:

    What? Where? I haven’t had an increase in my pay in almost 5 years. Yet my groceries, electric, insurance etc.. keeps getting a raise.

    • mikedt says:

      Every year my insurance costs go up even though I’m covered for less. At this point I pretty much only have catastrophic insurance.

    • triana says:

      I hear ya. The company I was with for three years never gave me a raise. I changed jobs, and was rewarded with barely more than a dime. Didn’t come close to covering the increase in groceries, utilities, etc.

  4. Guppy06 says:

    How much has executive compensation gone up over the same period?

  5. triana says:

    I’m sure my 12 cent raise was factored into those numbers.

  6. ferozadh says:

    We have mocked our Economy. And now the Economy has cast its vengeance on us all! Yea, it is an angry and unforgiving Economy. To repent we must stop frivolous spending! Instead of paying for cable let us watch clouds! Instead of buying clothes, wear but sheets from thine beds! Cut spending to only the bare essentials! Water and bread and margaritas, yea.

    • SavijMuhdrox says:

      and what exactly is in this fruit punch, i mean margarita, oh exalted one?

      eh, who cares, bottoms up! GULP!

      CHOKE!

      THUD!

      [actually kinda like the idea of watching clouds over cable though]

  7. lvdave says:

    I always wonder what set of tealeaves these idiot economists use to come up with these numbers.. I truly believe they just pull the numbers out of their butts..

  8. Mr_Magoo says:

    “It also means we’re up 3.5% over a year ago in June, and is also twice the pace of increases in prices over the last year as well,”

    There is absolutely no way that prices have only increased by 1.75% in the past year. The government needs to stop screwing around with the numbers to make things look better than they actually are.

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      +1

      I don’t know where they shop, but when I’m looking at prices for a freaking pound of bacon that run $6 plus per pound, and simple things like onions are approaching $2/pound, someone has their head up their ass. Even cheap chicken cuts are way over $1/pound, and it’s going to get worse with the drought situation.

  9. HogwartsProfessor says:

    Boost in income?

    HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA

    *breath*

    HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA!!!!

    Fuck them. I still can’t find a job.

    • Press1forDialTone says:

      That’s cuz you’re here commenting on Consumerist instead of
      looking for work…..I kid, I kid…

      • HogwartsProfessor says:

        That’s cuz no one will hire me. Why? I MADE TOO MUCH AT MY STUPID EXJOB.

        “Mandatory field: Opening salary, closing salary. Oops, sorry, this job only pays $7.84 an hour and she did the exact same work for $12.50. INTO THE ROUND FILE IT GOES!”

        Fuckers.

        • triana says:

          I’m making barely more than half of what I made at a previous job when I lost it. People won’t even consider that you might accept less.

  10. kathygnome says:

    1% “cost of living” raise here, but that was offset with a new insurance policy that will triple our out of pocket costs. Plus the fear of Romney winning and enacting the Ryan budget cuts which economists predict will cost us 4.1 million jobs? Spend more? Are you kidding. We’re looking to cut our spending even closer to the bone.

    • dolemite says:

      Yeah I got a 1% “cost of living” increase as well. The problem is, the cost of living goes up about 5% per year these days (insurance, food, gas, etc.) My wife had a bag of chicken tenders in the freezer and I noticed it was like 1.9 lbs or something. I remarked that I know that bag used to be closer to 3 lbs in the past, but I bet the price was the same or more, for like 35% less food. I think people are noticing the food price hikes, but aren’t noticing the hike is more like 40%, not 5%.

    • TasteyCat says:

      I think people might be more afraid of the fact that unemployment is higher than it was $6 trillion in deficit spending ago, at the highest level of any election year since 1936.

  11. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    Oh yeah, that nice little bump in income? I make 53 cents an hour more than I made this time in 2008, a whole $21.20 per week. Oh, and as a bonus, my health insurance costs rose a lot more than that. Couple that with prices doubling in gas, fuel oil, many food items, etc., well, I’m trying to find another job as I can’t keep working here at a loss every year.

    My boss, who makes about 2 1/2 times my wages, can’t understand why I’m asking if we’ll ever see at least a cost of living increase. After all, I get paid really well (her words).

    So no, I’m not spending any extra money. I’m socking away every penny I can lay my hands on because in this environment, you never know when the shit will really hit the fan and you’ll need that money to pay for electricity or gas. You can’t use iPads for fuel.

  12. suezahn says:

    And some of us are still playing catch-up after 10 years of stagnated/slashed wages and have nothing left over.

  13. Mr Grey says:

    I thought we all needed to save more?

  14. kanenas says:

    LOL. Love the comedy today. A nice bump in income? Hah.

  15. yankinwaoz says:

    Did you all see The Onion “article” about a CEO who needs a $300 million dollar Aspen estate to relax in. The best part is that he bought a Hawaii island to unwind from the stress of owning a $30M Aspen estate.

    http://www.theonion.com/audio/ceo-needs-30-million-aspen-home-to-recharge-batter,28979/

    Warning… the link is to The Onion’s audio player. NSFW. Plug in headphone first.

  16. Harry Greek says:

    I find it awesome, how conservatives love to point out that people got into the 2008 mess because they lived beyond their means. Now, when there is a need for capitalism to go into full spend mode and get the economy revitalized,… people are saving.

    And, the rich sure aren’t creating American jobs. They are shipping that overseas.

    So, who exactly is suppose to spend money??

    • dolemite says:

      Well, if the rich gave up just 5-10% of their money and gave their employees raises or better benefits, we all might HAVE more money to spend! Instead of laying off people and forgoing raises again and again. When my cable bill goes up another $5, and gas goes up 35 cents, and we have another record heat month but people’s paycheck is the same, they don’t have $ to blow on clothes, etc.

  17. PragmaticGuy says:

    So…the average income went up .5%. Let’s take someone who’s making $800/wk. That would be $4. Less of course 6.15% SS and Medicare so we’ll figure that’s 25 cents. Then of course there’s taxes of about 10% in the lowest bracket so that’s another 40 cents. So, that person is left with a whopping $3.35. Hell, that’s a car payment…..if you buy Hot Wheels.

  18. Sian says:

    income jump? who?

    I’d better get one soon, cause my savings is about evaporated. once that’s replenished, THEN I can start thinking about maybe buying things.

  19. Jimmy37 says:

    And why should we spend it?? Businesses are socking away their profits, not expanding and hiring, because of all the uncertainties and higher labor costs.

  20. Mark702 says:

    Haven’t had a raise in 3 years, at the same time, cost of everything is going up resulting in a net loss. Groceries, gas, insurance, anything you can buy anywhere is going up in cost.

    In 2008 I made $2400/month. In 2012 I earn $2000/month, based to a loss of clients due to the businesses dying out. I’ve seen over 40 local small businesses that we work with that closed shop.

  21. axiomatic says:

    Yeah that bump is at the top. Us working class white / blue collars are still riding that flat plateau our salaries hit before the crash.

  22. ECA says:

    ” 0.5%, which is the best increase we’ve had on paychecks since March. It also means we’re up 3.5% over a year ago in June,”

    So,
    for those working HARD. and having a job…On $10 per hour They got a $0.05 raise per hour?? And EXTRA $0.45 per 8 hour shift?

    Somebody check my wallet!! I think I missed something..
    NOPE, not there..
    NOW where did that do??
    OH!, I know..they raised the Price of food…

  23. MarkFL says:

    The store I worked at closed last fall, but at that time, nobody at store (or district) level had received a raise in three years, not even cost of living. I know from talking to people at other stores that they still haven’t. However, since the company was publicly owned, it was on public record that the executives were still getting their raises and bonuses.

    This is happening pretty much everywhere, so what do you think the jump in income is for just the executives? Clearly a lot more than 0.5%. Yet we are constantly told that they are so horribly put upon these days…