Savings & optimism increase.

U.S. consumers are saving more of their incomes than at any time since 1993--a major shift toward frugality that's expected to be one of the lasting effects of this recession. Still, consumer sentiment rose for the fifth month in a row in June to its highest level since February 2008. The consumer sentiment index, produced by Reuters and the University of Michigan, rose to 70.8 in June from 68.7 in May, though it remains well below its peak of 96.9 in January 2007. The personal saving rate jumped to 6.9% in May, the Commerce Department said Friday, compared to 5.6% in April. The gain was partly attributable to one-time government payments to eligible seniors made under the Obama administration's economic stimulus. But recipients seem unwilling to spend right away. Though the payments helped boost personal income by 1.4% in May, consumer spending--the main driver of U.S. economic growth--rose just 0.3% from the prior month.

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