Personal Income on the Rise
on January 4th, 2010 at 5:11 amAccording to new government and private reports, personal income rose for the third straight month. After adjusting for inflation, income was up 1.7% over the three-month span. This is excellent news considering the 10% plunge in income in late 2009.
Predictions indicate that personal income will continue to climb throughout 2010. This is a direct result of the fact that people saving more than they have in recent years.
Over the long haul, greater savings should translate into more investment, which would ultimately help the economy. However, in the short term, higher savings would very likely limit economic growth by keeping consumer spending sluggish.
Many forecasters are projecting consumer spending to grow about 2% this year. That could pick up if the job market recovers faster than expected. The latest reports show that unemployment dropped to 10% in November. Job cuts halted after almost two years of consistent cuts.
Reports indicate that consumer confidence is returning, albeit at a very slow rate. This is typical following a financial crisis. The healing process is long and arduous. The most important thing for the average person today is to be smart with their money.
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