2012 spending

Spending increased in 2012 at the fastest clip since 2006, reports the Wall Street Journal.  Back then, consumers were using their homes as ATMs, refinancing to take advantage of low rates and rapidly rising property values.

This year, spending increased as a result of rising costs of everyday goods.  Consumer prices rose 3.2% – there’s no way around spending more when a gallon of milk now costs an extra 10 cents.  Good news is that income also rose, nearly 1.9%.

The WSJ highlights this report as further evidence that “American’s finances are slowly recovering”.  Great news for the US consumer.