QE Effect: U.S. And Euro Area Savings Rate Drops To Record Low, Incomes Disappoint, Corporate Cash Accumulation Starting To Slow

Euro Area Savings Rate Drops To Record Low, Disposable Income Has Biggest Drop Ever

A month it was the US which saw its savings rate plummet to the lowest since the start of the Second Great Depression…

And now it is the Euro Area’s turn to see its savings crumble to 12.2% in Q4 2012, from 12.8% previously, the lowest in, well, ever, since the adoption of the Euro:

Why? Gross disposable income just imploded, dropping at the lowest “growth” rate ever. Notably, wages were a far bigger detractor to income than taxes.


U.S. Spending On Services Jumps By Most Ever As Incomes Disappoint, Savings Rate Near Five Year Lows

Real disposable income: oops.

Finally, since both spending and income rose at the same pace, the personal savings rate was flat from February, or at 2.7%: just barely higher than the 5 year low of 2.2% posted in January. In other words consumers continue to be tapped out, and it is unclear where the income spurt will come from to drive the much needed spending surge in the coming months. Oh yes, Bernanke’s trickle down magic of course. How could we forget.



U.S. consumer spending slows in March

Smallest gain in three months another sign economy has softened

Consumers were more cautious spenders in March, and income growth also softened, reinforcing a bevy of reports that indicate the U.S. economy slowed as the spring began.

Consumer spending rose a seasonally adjusted 0.2% last month, down from 0.7% in February, the Commerce Department said Monday. It was the smallest gain in three months.

The increase in spending, however, was slightly higher than 0.1% forecast of economists polled by MarketWatch, so the report helped pushed stock prices higher in Monday action.

Consumer spending is the main engine of economic growth. When Americans buy more goods and services, businesses generate higher sales and profits and can afford to hire workers. Less spending results in slower economic growth.


Corporate cash accumulation starting to slow, index shows





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  • ddearborn


    Corporate cash “accumulation” is starting to slow for several reasons. First the many companies have significantly increased their dividends. Second many major corporations have dramatically increased compensation for their senior management. And third Major US corporations have slowing and quietly been investing more and more money in Asia. And the real irony/tragedy here is that this is all possible courtesy of the US taxpayers. You see about 1/3 of all this offshore cash rightfully belongs to the American people. Simply put these corporations sitting on mountains of cash are tax cheats.
    And they were allowed to do it in the first place and are allowed to continue to do it because they bribed our Congress and White House. In short the American people were sold out. Hardly news

    to the American people. But the media seems to be suffering from selective amnesia when it comes to things like truth justice Palestinian genocide and of course our money.