Tight Belts Should Benefit Consumer Stocks

While the markets were closed on Good Friday, the Bureau of Economic Analysis released its monthly report on personal income and spending in February. The headline report was favorable, with personal income up 1.1% month over month and personal spending up 0.7%. Expectations for a rise in personal spending were baked in the cake, given the jump in gas prices during the month. That resulted in a 2.2% increase in energy goods and services during the month. 

I was shocked at the data when I read through the report for February -- the personal savings rate marked its second month below 3%. Moreover, consumer spending grew modestly and in line with income growth, leaving little for discretionary spending. In other words, many of us are still buying the necessities -- the staples of everyday life -- and watching our dollars and cents when it comes to more extravagant items....417 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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