The BEA’s Personal Income and Outlays report shows personal income rose 0.4% but consumer spending rose a scant 0.1% in February.
The weak rise in spending is fresh on the heels of a weak 0.2% rise in January.
Personal income increased $57.7 billion (0.4 percent) in February according to estimates released
today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $44.6 billion
(0.3 percent) and personal consumption expenditures (PCE) increased $7.4 billion (0.1 percent).Real DPI increased 0.2 percent in February and Real PCE decreased 0.1 percent. The PCE price index
increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.The increase in personal income in February primarily reflected increases in wages and salaries and
rental income of persons.The decrease in real PCE in February primarily reflected a decrease in spending for services that was
partially offset by an increase in spending for nondurable goods.Personal outlays increased $7.5 billion in February. Personal saving was $808.0 billion in
February and the personal saving rate, personal saving as a percentage of disposable personal income,
was 5.6 percent.
Real Spending Down Again
If the Fed expected consumers to spend more because consumers are confident or inflation is up, they were totally off base. For the second month consumer spending was negative.
This report is likely to take a bite out of first quarter GDP estimates.
Yesterday, I noted the Third Estimate of 4th Quarter GDP Increased Slightly to 2.1% thanks to increased consumer spending. It didn’t last.
Mike “Mish” Shedlock
If consumers are not spending more in the face of rising income it may mean they don’t believe they can depend on the increased income in the future.
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Who needs more income when easy and cheap debt is so abundant…?
Income has ceased to matter.
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O/T EU attempts to separate Gibraltar from UK by taking position that any deal reached for after exit will not apply to Gibraltar “unless Spain and UK agree” – i.e. means accepting Spain has veto of application of deal (which UK would be ‘enjoying’) to Gibraltar. It is like Brussels saying they want to be able to pick off Gibraltar
http://www.telegraph.co.uk/news/2017/03/31/outrage-spain-given-effective-veto-future-gibraltar-eu-plans/
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All about positioning for the breakup negotiations. Only means something if the EU is willing to go to war to force the UK’s hand on Gilbraltar
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They can get the same ass kicking the last bunch who tried this got. Remember how the Falklands war turned out? Stay tuned for more of the same. Europeans are candy ass pussies.
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Yes, it’s positioning. However when you turn up to negotiate with someone, when there is a strict timeframe, and they start by laying down conditions that they know will not be accepted, that are offensive, that is a very clear way to upset the table and tell you you are wasting your time. The entire negotiation could become stuck for two years on this point, it could be entirely vetoed by Spain if it believes EU has promised this concession to it, as all agreement has to be approved by each country. Spain is NATO, Spain is EU etc. might not mean anything in two years time….and they say they don’t want parallel negotiation… what should UK do, sit there arms crossed until they remove that compromise?
John – that is the danger. You have a section of Spanish society, and some real dumbf***** politicians around who would spend the coming decades isolating Gibraltar and gaining status for doing so – and they are capable of breaking out from the control of EU, or working with its most negative side, etc. , are already escalating confrontation with Gibraltar. Examples include opening diplomatic bags, causing massive delays at the border, entering Gibraltar territorial waters as if own, even shooting incidences, rammings. I am sure they want to keep Madrid, but there are some really stupid self inflated politicians around looking for excuses, and the attitude they have is infectious. As Cataluña independence confrontation looms up now, I am not sure if it will be a humiliating distraction or if it will really stir up a hard nationalist movement that might extend openly to Gibraltar.
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Perhaps the UK should consider inoculating the place, by making it a “New Australia” style haven in the sun, for all those ex IRA operatives from cold, rainy Ulster…..
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Does health insurance not count as consumer spending?
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I tend to think that if this continues for a long time, it means that the income distribution is tightening (ie, the income distribution is moving toward wealthier people, and the income distribution on the lower 67% and 50% and so on, is dropping.
That’s because there’s a per-person limit to how much a person can spend in their income bracket. It takes a while to understand your new situation and increase your spending significantly. Bill Gates might easily blow a couple million on Picassos — but I blow my money on McChickens. Or whatever.
But a tightening income distribution implies a breakdown in the workings of the economy, a moving of assets away from structurally sound investment (and therefore an increase in the likelihood of failures of all kinds), and a loss of resilience to disaster.
Therefore, since I think this HAS been going on for a while, I forecast disasters. More. Worse. More devastating.
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maybe because of the 3 P’s in many stores (Price, Product & Personel),. I mean why buy a book at Barnes & Noble that costs $12 more than Amazon or an Ipod touch from Target that costs $60 more than Amazon.. Many popular items are OUT OF STOCK or nowhere to be found at regular brick & motor stores… Personnel?? I know that unemployment is low and finding to people to work at $15 an hour which is effectively a sub minimum wage in NYC or the NYC suburbs is a tall order but stores now hire these hard left social justice warriors that are such snowflakes that any perceived slight by a white Caucasian (especially one that is jewish) leads to one being tarred and labelled a racist. since retail stores have seen parabolic profits for years they treat you like they are doing you a favor by letting you shop there
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maybe because of the 3 P’s in many stores (Price, Product & Personel),. I mean why buy a book at Barnes & Noble that costs $12 more than Amazon or an Ipod touch from Target that costs $60 more than Amazon.. Many popular items are OUT OF STOCK or nowhere to be found at regular brick & motor stores… Personnel?? I know that unemployment is low and finding to people to work at $15 an hour which is effectively a sub minimum wage in NYC or the NYC suburbs is a tall order but stores now hire these hard left social justice warriors that are such snowflakes that any perceived slight by a white Caucasian (especially one that is jewish) leads to one being tarred and labelled a racist. since retail stores have seen parabolic profits for years they treat you like they are doing you a favor by letting you shop there
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