The BEA's Personal Income and Outlays report for February 2018 is negative for first quarter GDP.

  • Disposable Personal Income (DPI) jumped 0.4 percent in February, but real (inflation-adjusted) DPI rose only 0.2%.
  • Personal Consumption Expenditures (PCE) rose 0.2% but real consumer spending was flat.
  • Last month I reported Consumer Spending +0.2% Prices +0.4%: Real Spending Declined 0.1%.
  • Today we see a negative revision taking January real spending to -0.2%.

The economic illiterates are cheering the rise in inflation. The consumer clearly isn't.

This was expected behavior, at least in this corner. It's payback for the fourth-quarter hurricane-related spending spree.

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Before anyone gets excited about wages, how is the wage growth distributed? How did the median wage-earner fare compared to consumer prices?

That data is not available yet, but I strongly suspect the median wage earner got hammered.

Two months of the first quarter are in. The consumer is not leading the way as most expected.

Mike "Mish" Shedlock