Yossarian-22 posted:

U.S. consumer spending rises; savings drop to 10-year low http://www.reuters.com/article/us-usa-economy-spending/u-s-consumer-spending-rises-savings-drop-to-10-year-low-idUSKBN1FI1NJ

Rising household wealth due to record gains on the U.S. stock market as well as higher home prices likely made Americans more confident to dip into their savings to fund purchases, economists said. Savings are now at levels last seen in December 2007, when the economy slipped into recession.

"It is true that the gains in consumer confidence as well as in the stock market and housing wealth are making Americans feel much better today than they were previously," said Eugenio Aleman, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

"That said, the U.S. consumer will need to see continuous growth in income over the year in order to be able to continue to keep up the current pace of consumption."

If incomes don't rise, lol, bubbles will burst and it will own. Nice that unions are dead!

On the other hand, if incomes do rise, the fed will probably raise interest rates and try to stymie inflation thus causing a Paul Volker style recession. That's what my elementary economics intuition suggests to me anyway. Fed may raise interest rates four times this year according to the article