Personal Incomes Grow in November

Government and private reports indicate that personal income grew in November and is expected to continue gaining next year. The 0.4% rise in personal income occurred even as U.S. workers continued to lose jobs, reported the Los Angeles Times.

Americans also are putting more of their income into savings. The personal savings rate was 4.7% in November, according to the Bureau of Economic Analysis.

That’s a huge shift from earlier in the decade when the U.S. savings rate plunged as many consumers spent like crazy and went deep into debt. Many people also took advantage of strong gains in the stock market and rapidly rising home values.

Now more folks are taking negative financial news seriously and looking to pay off debt. Many people also are beefing up their emergency funds and retirement accounts due to the constant economic uncertainty that has touched the lives of many Americans.

However, the unwillingness to spend is likely to slow down economic recovery. Because many people continue to remain concerned about their job prospects and more the overall direction of the economy, the savings rate may continue to rise as tight-fisted consumers sock away money for the proverbial rainy day.

A Gallup poll earlier this year indicated that 32% of Americans who had cut back their spending said they planned to continue that pattern in the future.

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