The real news here is the savings rate. Consumers continue to retrench, socking away $620 billion in April. Personal consumption expenditures now stand at late 2007 levels.
The first graph offer more historical data than the second. It is clear that income has plateaued, at least in the short run, and consumers are no longer borrowing to maintain the same level of spending (whether forced by shrinking credit markets or by wisdom).
It is interesting to note that the real personal income story is unimpressive. Adjusting for inflation, personal income in our country has grown at the following annualized rates:
5 years: 2.30%
10 years: 2.32%
20 years: 2.61%
Not great, are you be happy with making only 2.3% more money in real terms per year?
