03.01.13
Intrepid consumers shrugged off a return to the 6.2% Social Security tax, according to the US Commerce Department. Consumers boosted spending in January for the third straight month, suggesting that a tax hike at the start of the year did little to alter their behavior. Consumer spending advanced a seasonally adjusted 0.2% last month, which matched the estimate of economists polled by MarketWatch.
Consumer spending represents as much as 70% of the economy. When Americans buy more goods and services, businesses generate higher sales and profits and can afford to hire extra workers. Less spending results in slower economic growth.
The increase in spending came despite stronger headwinds to economic growth. The incomes of earned by Americans, meanwhile, sank 3.6% in the January to mark the biggest decline in 20 years. Economists had expected incomes to shrink 2.6% because of sharply lower dividend and bonus payments last month.
Of course, today is a new day, a new month and a whole new set of problems caused by the incompetents in Washington. After more than a year of bickering, $85 billion in automatic budget cuts went into effect today. The cuts, known as The Sequester, will impact everything from defense to welfare to construction. The impact on the economy is uncertain, but the stock market is feeling the effects. In early trading the Dow Jones Industrial Average dropped 100 points.
Consumer spending represents as much as 70% of the economy. When Americans buy more goods and services, businesses generate higher sales and profits and can afford to hire extra workers. Less spending results in slower economic growth.
The increase in spending came despite stronger headwinds to economic growth. The incomes of earned by Americans, meanwhile, sank 3.6% in the January to mark the biggest decline in 20 years. Economists had expected incomes to shrink 2.6% because of sharply lower dividend and bonus payments last month.
Of course, today is a new day, a new month and a whole new set of problems caused by the incompetents in Washington. After more than a year of bickering, $85 billion in automatic budget cuts went into effect today. The cuts, known as The Sequester, will impact everything from defense to welfare to construction. The impact on the economy is uncertain, but the stock market is feeling the effects. In early trading the Dow Jones Industrial Average dropped 100 points.