Sorry, Fools -- the economic news isn't nearly good enough to justify today's Wall Street rally. According to Monday's Bureau of Economic Analysis report on income and spending trends in America, citizens are shopping in spite of their nearly empty wallets. After blipping upward in August, American consumers saw incomes fall again in September, a trend six months in the making:
Real disposable incomes in America dropped 0.3% in September, erasing August's meager gains. Yet real consumer spending increased 0.1%. Why are we still spending? And how are we spending more today, with less money?
Forget your wallet. What's in your bank account?
Alas, we drew down our savings. As incomes fell, America's savings rate dropped in tandem, down 0.3% sequentially. And can you blame us?
These days, it doesn't pay to save. According to Bankrate.com, bankers that made out like bandits on the back of American taxpayers just a couple of years ago are now offering mere pittances to those who choose to save. Fifth Third Bancorp
Go ahead, treat yourself
I recently had the chance to chat with some folks from Limited Brands
If that's the case, Fools, I can't blame you. After a long, hard recession, maybe a treat is in order, just this once. But in the course of your shopping, make sure you don't forget the stocks behind the stores you frequent. After all, Limited doesn't just sell lingerie; it also pays a tidy 2% dividend, better than you'd get from most banks. Same thing for Starbucks. $3 coffee, 1.8% dividend yield. Think about it.
What do you think about BEA's facts and figures? Take the Foolish Rorschach test in the comment box below, and tell us what you see in the chart up above.
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