Following the drastically revised-away surge in spending in January, and the savings rate surge to 2012 highs in Feb, March’s income and spending data released today showed more problems for The Fed. While income grew 0.4% MoM (more than the 0.3% expectations), spending disappointed with a mere 0.1% rise (against +0.2% MoM expectations). Year-over-year spending growth slowed to 3.5% – the weakest since December and income growth slowed to 4.0% YoY leaving the savings rate at its highest since January 2013.
Income up, Spending down:
Which in longer historical context….
… Pushed the savings rate to match its highest since December 2013:
As all that hope-strewn spending has been revised away, and as a result following several revisions, the biggest concern to the Fed, the savings rate, has just hit its highest since December 2012, which means one thing: instead of spending money US consumer are quietly packing it away under the mattress despite ZIRP.
Charts: Bloomberg
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