The MPC is Very Low

The BEA reports disposable income increased by $178 billion in May, while consumption increased $25 billion. In the textbook Keynesian framework, that implies an extremely small marginal propensity to consume of 0.14 (25/178). That, in turn, means a modest multiplier effect. While expansionary fiscal policy is still the right thing to do, a smaller multiplier means a larger stimulus is necessary to achieve a given increase in output.

Of course, the fluctuation in the MPC serves to highlight the limitations of the "consumption function" approach...

Another implication of incomes growing faster than consumption is an increasing savings rate. In May, the savings rate was 6.9%, which means we've quickly and painfully re-attained historically "normal" levels, according to this chart at Economix, after hovering near zero over the past several years. More domestic saving also means less borrowing from the rest of the world, which is reflected in a narrowing current account deficit.