Spending Growth Slows but Saving Higher

By Scott Hoyt in West Chester 7/30/2010

Consumer spending growth slowed in the second quarter. Perhaps more significantly, it slowed from a much lower level than previously thought. The Bureau of Economic Analysis incorporated its annual revisions of the data, and the changes show a modestly more severe decline in spending during the recession, but a significantly weaker recovery. Annualized growth in real spending in the five quarters from the start of last year through the first quarter of this year was revised down by at least two-thirds of a percentage point in each quarter. Rather than having already reached its prerecession peak, real spending remains below its peak. Real spending fell 2.4% between the fourth quarter of 2007 and the second quarter of last year and remained 0.9% below its peak in the second quarter....

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