Despite good job growth, consumer spending is growing faster than personal income, driving the savings rate down to 3.7%, the lowest rate in years. Why? Unemployment insurance income is falling. In Jan and Feb 551K jobs were created while 550K lost unemployment benefits. What’s going on is the wages these folks are earning aren’t much more than the UI they lost. I also bet personal income data will be revised up.
Tag Archives: Job Gains
Payroll Problems Persist
Nonfarm payrolls rose by a profoundly dismal 18K in June, way below the 125K gain expected by economists! Making things worse, job gains in May were revised down to 25K from 54K. The unemployment rate inched up by 0.1% to 9.2%. Government employment fell by 39K. If you include discouraged workers and those forced to work part-time, the unemployment rate rose to 16.2% from 15.8%! This is about as bad as anyone could imagine.