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Stock futures decline

NEW YORK — Investors are nervous about the savings rate outpacing spending.

Stocks slipped in early trading today after the Commerce Department reported that personal spending, incomes and savings all rose in May. What troubled investors, though, was that the savings rate soared to 6.9 percent, a 15-year high, while spending rose by a modest 0.3 percent.

The trend suggests that consumers are being shrewd with their money. But it’s not great for the overall economy in the short-term.

Phil Orlando, chief equity market strategist at Federated Investors, said he expects the savings rate to eventually hit 10 percent before it eases. The savings rate had been 5.6 percent in April, and annual savings rates were below 1 percent from 2005 through 2007.

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"If people ramp up savings that aggressively, that is going to result in less GDP recovery than ordinarily would be the case," Orlando said.

May incomes surge

WASHINGTON — Households pushed their savings rate to the highest level in more than 15 years in May as a big boost in incomes from the government’s stimulus program was devoted more to bolstering nest eggs than increased spending.

The Commerce Department said today that consumer spending rose 0.3 percent in May, in line with expectations. But incomes jumped 1.4 percent, the biggest gain in a year and easily outpacing the 0.3 percent increase that economists expected.

The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent, the highest level since December 1993.

The income increase reflected temporary factors relating to the $787 billion economic stimulus program that President Obama pushed through Congress in February to fight the recession. That program included one-time payments to people receiving Social Security and other government pension benefits.

Orders for planes cancelled

Australia’s Qantas Airways Ltd. said today it had canceled orders for 15 Boeing 787s and delayed the delivery of a further 15 aircraft due to turbulent market conditions.

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Qantas Chief Executive Alan Joyce said the decision had not been influenced by Boeing Co.’s announcement earlier this week of a design issue in the 787 and further delay to the aircraft’s first flight. He said discussions with Boeing about the order had started some months ago.

Qantas said it had reached a mutual agreement with Chicago-based Boeing Co. to defer the delivery of 15 Boeing 787-8 aircraft by four years and cancel orders for 15 Boeing 787-9s (which are slightly larger) scheduled for delivery in 2014 and 2015.

Joyce said Qantas remained committed to the 787 as the right choice for the international expansion of Jetstar, its low-cost subsidiary, and as an eventual replacement for Qantas’ Boeing 767 fleet.

— Associated Press

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