Personal Income and Spending Increase at Healthy Rates

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