The U.S. savings rate has jumped to its highest level in 39 years
The numbers: U.S. incomes fell in March but not as much as spending, pushing the savings rate to its highest level in 39 years, the government said Thursday. Income fell 2% in March, with an identical decline in disposable income.
Inflation pressures eased in March. The closely watched PCE price gauge fell 0.3% in the month led by energy prices, pushing down the increase over the past year to 1.3% from 1.8%. The core PCE price index slipped to a yearly rate of 1.7% from 1.8%. Spending declined for services, such as health care, dental and food services. Within goods, the leading decline was spending on autos. Real spending on groceries rose 19.1% in the month.
iframe.twitter-tweet { width: 100% !important; } Big picture: The shutting of businesses and the stay at home orders to combat the coronavirus pandemic have damaged consumer spending, the engine of the U.S. economy. There should be another sharp drop in April before some improvement in May as some governors allow their states to open up. At the same time, inflation seems headed even lower.
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