Around about four weeks ago, I was skimming the government's April income and spending report, noting the sizeable jump in consumers' income and how it created almost no response at the cash register. I attributed this state of affairs to the previous month's overspending (see below), but I clambered out on a limb to predict "another big bump -- and perhaps more than one -- in the income column over the next few months." I further predicted that newly flush Census workers would "run right out and spend their paychecks" in May.
Was that the right call? You be the judge:
From where I sit, at least, this does seem to be the way things have played out. For the third month in a row, U.S. consumers, as a group, found their wallets noticeably fatter than they had been in the previous month. For the second month in three, they reacted to this happy development by upping their spending.
Yet there's something surprising here, too. For the second time in a row, American incomes and spending rose -- with the latter lagging the former. According to the Commerce Department's Bureau of Economic Analysis, personal savings throughout the nation rose to 4% of annual income last month. That's surprising when you consider how very stingy the bankers at Citigroup
Americans' surprising reluctance to spend with abandon is sending tremors down the corporate spines at retailers from American Eagle
Let's hope so. And let's make sure to check in when our next major retailer, Family Dollar
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, down below.