This report on consumer activity in January is mixed

This report on consumer activity in January is mixed - 1...

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1. This report on consumer activity in January is mixed - what aspects do you see as good news for macro-economic performance in the spring and which aspects were not encouraging? The aspects that I see as encouraging was the increase in incomes that rose 0.3% in January. There was also an increase in personal consumption spending of 0.4% from the previous months. However this increase was due to a 0.9% increase on service which is attributed to the Affordable Care Act. The aspects that I found discouraging are that inflation is still continuing to increase which in turn could lead to an increase in interest rates and also raise the prices of the same goods and services that has recently seen an increase in consumption. 2. How did consumer spending change compared with income levels? What happens when these changes are not equal - did consumers likely save more or less in January? Both consumer spending and incomes rose but the number for consumer spending can be misleading. The rise in consumer spending was due to larger consumption rates in health
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