Americans are spending more and saving less

Americans are on a spending spree. And that’s not necessarily a good sign for the longer-term economy.

The Department of Commerce late last week reported that personal income rose only 0.3 percent in November, while personal spending jumped by 0.6 percent.

Both numbers were higher than expected.

Not surprisingly, the personal savings rate in the US declined — it had to — to just 2.9 percent from 3.2 percent. That was the lowest since November 2007, which was the start of bad times in this country.

Also not surprising is the fact that credit card use is surging.

The US economy has been growing at an annual rate of around 3 percent for the past few quarters. That probably won’t hold up if the spending/savings numbers continue the way they have been.

We will soon get to see what effect President Trump’s tax cuts will have on the economy.

Keep your fingers crossed.

Filed under