Americans On A Spending Spree

Swedish astronaut Christer Fuglesang as he takes a picture during the mission's fourth session of extravehicular activity, Monday Dec. 18, 2006. Also visible in the reflections in the visor is astronaut Robert L. Curbeam Jr. AP Photo/NASA

Americans' incomes rose modestly in July but their spending went up twice as fast, pulling the nation's personal savings rate to a record monthly low.

The Commerce Department reported Monday that personal income, which includes wages, interest and government benefits, grew by 0.3 percent last month, matching many anaylsts' predictions.

At the same time, spending rose by a brisk 0.6 percent, slightly faster than the 0.5 percent increase many analysts were anticipating. The increase was the biggest in five months.

In June, Americans' incomes and their spending grew by 0.4 percent each.

Disposable income - what is left after taxes - rose in July by 0.3 percent, matching the gain posted the month before.

All that spending drove down the personal savings rate - savings as a percentage of after-tax income - to a negative 0.2 percent in July, the lowest monthly rate ever. In June, the rate stood at a positive 0.1 percent.

Still, July's rate may not provide a clear picture of savings, economists have said. That's because the calculation doesn't take into account gains realized from such things as rising stocks and higher real-estate values.


Written By JEANNINE AVERSA
©2000 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed
  • CBSNews.com staff CBSNews.com staff

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