by Mish

The above spending and price numbers are in line with Econoday estimates. Income beat the consensus estimate of 0.3%.

Year-over-year, prices are up 1.4% vs. estimates of 1.5%. The Fed will not be happy with this development.

May was not a strong month for the consumer. Income did rise 0.4 percent but it wasn’t because of wages & salaries which could manage only a 0.1 percent gain. It was personal income transfers and proprietor income that gave a boost to income which the consumer, however, moved into savings, which rose 4 tenths to a 5.5 percent rate, and not spending which could do no better than expectations, at a 0.1 percent increase.
Spending was weakest in nondurable goods, down 0.5 percent in the month but, in an important note, reflected low energy prices not low demand. But spending on durables was also negative, down 0.3 percent. The positive is a moderate 0.3 percent gain for the biggest category and that’s services.
Price data are very soft, up only 0.1 percent for the core rate (less food & energy) for a year-on-year rate of only 1.4 percent, down 1 tenth in the month. This is the third decline in a row for the yearly rate and the weakest showing in a year-and-a-half. The overall PCE fell 0.1 percent with this year-on-year rate also at 1.4 percent for a 3 tenths decline.
The second leg of the second quarter did not turn out well for the consumer nor for GDP. But the weakness in price data is a more strategic concern for monetary policy makers who may be removing stimulus into inflationaryheadwinds.


Deflationary Headwinds?

Did Econoday mean “removing stimulus into deflationary headwinds”? The latter construct would make more sense (at least as the Fed and Econoday generally see things).

Mike “Mish” Shedlock

Personal Income Up But Real Consumer Spending Declines Second Month

The BEA’s Personal Income and Outlays report shows personal income rose 0.4% but consumer spending rose a scant 0.1% in February.

Personal Income Flat, Consumer Spending Weak, Real Disposable Income Down

The BEA’s report on Personal Income and Outlays for November was not exactly what the cheerleaders expected or the Fed Wants.

Personal Income Jumps But Spending Weak

Personal income rose 0.4% in August but spending, both nominal and real, rose a weak 0.1%

Disposable Income and Spending Jump: Real Income and Spending is Another Matter

Disposable personal income rose 0.4%, but real income rose only 0.1%. Real personal consumption expenditures were flat.

Personal Income, Spending, PCE Inflation Up in April

Consumer spending and personal income increased by 0.4% in April, matching the Econoday consensus estimates.

Consumer Spending +0.2% Prices +0.4%: Real Spending Declined 0.1%

Personal income rose 0.4% in January, but consumers only spent half of the boost.

Personal Income Up 0.1%, Spending Up 0.6%: What's the Problem?

Personal Income is up 0.1%, spending is up 0.6%. Real Disposable Income is up 0.1%, real spending is up 0.4%.

Personal Income Jumped in January, But It's a One-Time Deal

Personal income rose 0.6% in January. Real income rose 0.5%. Spending rose 0.2% and real spending only 0.1%

Export Prices Rise, Led by Agriculture, Finished Goods Flat; Import Prices Barely Move

July export prices rose 0.4% vs a 0.1% rise in import prices. The rise in import prices was in-line with the Econoday consensus estimate.