Consumers Most Penny-Wise in Almost 50 Years: Chart of the Day
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Consumers in the U.S. are spending more closely in line with their incomes than in any expansion in the past 48 years, learning the lesson of the last recession that living beyond your means often ends badly.
The CHART OF THE DAY shows the correlation between wages and purchases in the economic rebound that started in June 2009 is 94 percent, the highest of the seven expansions since 1965, according to data compiled by economists at RBC Capital Markets in New York. That’s 18 percentage points above the closest period, 1971-1973, and 88 percentage points higher than the 2002-2007 cycle, when consumers tapped home equity during the housing boom to finance spending.