Consumer spending fell 1 percent last month, while the savings rate rose 2.8 to 3.6 percent (see Washington Post article). Given that consumers have less revenue streams than before - employment (still for most), but less bonuses, dividends, capital gains, and home equity cash - it makes sense that they are saving what income they are receiving, just in case job losses hit their family, or the recession deepens or becomes prolonged. While the benefits of lower energy cost are helping, memories of $4 gas are also still in the minds of consumers. This of course continues to be bad news for consumer retail, and continues to help separate the wheat from the chaff as companies such as Circuit City and Linens 'n Things can no longer take the slowdown, and subsequent lack of sales and profits. I suspect that as we continue to keep hearing about how this is going to be an extended recession and even longer recovery, consumers will do their part to insure that it is indeed long as they reduce spending and save what disposable income they have. Ironically, it may be this prudent saving that helps keep the housing and stock market ATMs that consumers have depended on short of cash for quite a while.

According to the S&P's Dividend Record, only 598 of the approximately 7,000 companies tracked by S&P increased their dividends during the first quarter. This number was 19.2% less than in the first quarter of 2007. Another 83 companies actually decreased their dividends. Only 19 had done so during the same period in 2007. The decrease is the highest since 1991. Larger companies with market caps greater than $10 billion have raised their dividends 27.2% of the time, while those with a smaller cap only raised their dividends only 18.7% of the time.