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]