Last month, in a column entitled When You're in a Hole, Dig Faster, I needled American Consumers -- all in good fun, I assure you -- for the approach they've taken to dealing with our topsy-turvy economy. As I wrote at the time: "For the ninth month in a row, the indefatigable American Consumer has done his (and her) part to lift the economy out of recession." No matter how slowly our incomes have been to recover (when they did recover) from the economic downturn, Americans somehow found it within their hearts, and wallets, to spend money faster than they made it.

No longer.

Yes, Fools, it would appear that reality has finally caught up with our Constitutionally guaranteed right to pursue happiness -- and "put it on the card." In January, for the first time in a long time, American consumers saw their paychecks grow substantially. Surprisingly, they didn't immediately rush out to Wal-Mart (NYSE: WMT) to spend the difference. ("Drat!," said Wal-Mart, as it reported its seventh straight quarter of declining same-store sales.)

To the contrary, according to the latest report out of the U.S. Commerce Department's Bureau of Economic Analysis, Americans:

  • collected 0.4% more "real disposable income" in January than they did in December ...
  • but spent 0.1% less in "personal consumption expenditures" ...
  • and banked most of the difference. BEA estimates that personal saving, as a percentage of disposable income, spiked to 5.8% in December.

So what?
Now, the glass-half-empty folks will be quick to point out that incomes were up in January because the government cut employee payroll tax contributions. Which is true ... but I have to say, it's still encouraging to see that when handed free money, Americans rushed not to the mall to spend it, but to the bank to save it for a rainy day. But it's not great news for retailers. (When consumers did spend, they mainly did so frugally, visiting at tax-free online shops like (Nasdaq: AMZN).)

It's probably not what credit card hawkers like Capital One (NYSE: COF) want to hear either (on the other hand, since Cap-1 owns its own bank now, maybe it's not all bad news for them.) It's almost certainly not what the President and Congress intended when they passed the tax holiday, trying to put more dollars in consumers' wallets. But in the contest between immediate gratification and long-term financial prudence, I'm chalking up this one in the "wins" column.

That's my take on BEA's latest facts and figures. But what do you think? Take the Foolish Rorschach test, and tell us what you see in the chart up above, below.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

Wal-Mart is a Motley Fool Inside Value recommendation, a Motley Fool Global Gains selection, and Motley Fool Options has recommended a diagonal call position on Wal-Mart. The Fool owns shares of Wal-Mart. is a Motley Fool Stock Advisor recommendation.

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