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Long Term Perspective
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Typically, consumers increase spending in direct proportion to gains in disposable income. Since 1996, spending has outpaced income, as consumers felt wealthier from stock market gains and housing appreciation. Notice how the gap widened in 1998 and 1999.
Short Term Perspective
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After a brief reversal in the second quarter when income outgrew spending consumer spending once again outpaced income in the third quarter. Real personal consumption expenditures expanded at a 4.5 percent rate, while disposable income grew only 2.4 percent. As a result, the personal savings rate remains in negative territory.
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Real GDP vs. Final Sales
Real Consumer Spending vs. Real Income
Debt Burden vs. Savings Rate
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Business Fixed Investment vs. Net Cash Flow
New Orders
Housing Starts vs. Mortgage Rates
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Merchandise Exports vs. Trade Weighted Dollar
Merchandise Imports vs. Trade Weighted Dollar
© Econoday, 2000. All Rights Reserved.
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