US personal income and spending worsen

The US personal income and spending data is generally weaker than expected. It is the first monthly decline in three months in March as incomes slide and people saved regularly. While they prove oneself equal to the crisis, for instance they try to cope with the recession.

In real terms, personal consumption expenditures sink by 0.2 per cent and this followed a revised increase in February. But in general, in the first quarter of this year consumption rose at an rate of about 2 per cent. The cause is cheaper petrol and a boost from tax rebates.
Moreover, the incomes also fell by 0.3 per cent and this for the third straight month in March. The decline is due to job cuts, pay freezes and eliminated bonuses, who savaged salaries recently.

The commerce department’s gauge of prices decreased by 0.2 per cent but was up when food and energy is exclude. Meanwhile the savings rate rose to 4.2 per cent. Chief US economist at IHS Global insight predicted that there will be a drop in employment and consumers have to be cautious.
New US jobless claims eased, a decline by 14,000 to 631,000. This is in contrast with the labour department figures, they showed a rose to a record of 6.27 million.

According to me, this situation of slowdowns in the different sectors, in the behaviour of consumers,...is normal in these hard times. We have to cope with the problems but in fact the decline in income and spending are just causes of the crisis. So we can speak of a vicious circle.