Personal Income and Spending Increase at Healthy Rates
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Americans’ personal incomes and spending increased in 1993 at rates that economists see as harbingers of healthy expansion this year.
Incomes rose 4.7% last year, while inflation rose just 2.7%. Spending rose 6.1%, the biggest increase since a 6.8 gain in 1990.
“These numbers do confirm a solid year of economic growth,” said David Jones, an economist at Aubrey G. Lanston & Co. “There are hints that we ended the year on the stronger side, with a lot of momentum coming into 1994.”
The latest income and spending figures closely match economists’ forecasts. For December, incomes rose 0.6% and spending rose 0.5%.
Some analysts are concerned, however, that because spending outpaced incomes, consumers will be forced to slow consumption in 1994, reducing the rate of economic expansion.
Yearly Increases Personal income
1987: 5.9%
1993: 4.7%
Consumer Spending
1987: 7.1%
1993: 6.1%
Source: Commerce Department
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