In advance of today’s GDP release, it was expected that the Q2 estimate would be around 2.6% (it was only 1.2%). The major reason for the anticipated rebound was “strong” consumers, a theme that has been a part of the dominant economic narrative since 2014 introduced the phantom “best jobs market in decades.” No matter what happens in the economy, [...]
In some contrast to spending or even “demand”, the economic problem is and has always been the lack of income growth. The difference in economy between income and spending is debt. As noted earlier, it was clear that the asset bubbles, based on debt via eurudollar expansion, created a boost in overall “demand” as represented in GDP’s Real Final Sales [...]
The final revision to Q1 GDP changed very little, at least in its natural format given that there are benchmark revisions coming in less than a month that could significantly alter all of this. Even with “residual seasonality” there is every reason to suspect that the economy is weak even as compared only to the past few years. That seems [...]
The emphasis on the labor market has become ubiquitous but it is not being used in the manner with which it should be used. It is now permanently attached to words like “despite” or “in contrast” no matter which economic data point is being described. The Wall Street Journal provides a perfect example in writing about the latest update for [...]
The Markit Services PMI flash reading for March rebounded from the sub-50 reading in February, but only slightly. The calculation continues to suggest that the “services economy” is following the manufacturing and “goods economy” even if with some lag. The internals of the survey were not any better, with the new orders component falling to the lowest level of the [...]
If China and US manufacturing are suffering from what looks like the contours of a slowly progressing recession, we don’t have to go very far to find the genesis. The common denominator is and has been US consumers. That much is evident in very clear fashion through retail sales during the Christmas season that were abysmal. The BEA’s update for [...]
Any reasonably or relatively objective view of the Bureau of Economic Analysis’ estimates for PCE and Personal Income (personal income and outlays) render more questions than answers; more doubts than satisfaction. For one, the series continually undergoes not just heavy revisions and not just at the benchmark continuities, but all over the place. Further, these revisions, particularly between income and [...]
Spending and wage growth disappointed in September, particularly as incomes continue to register barely any growth. The fact that this stagnation has continued for several years allows commentary such as this: U.S. consumer spending in September recorded its smallest gain in eight months as income barely rose, suggesting some cooling in domestic demand after recent hefty increases. The Commerce [...]
Today’s release of personal income and spending is very much related to the revised GDP figures, though I have no doubt that the BEA wishes it were not. To start with, the ongoing chain of benchmark revisions has produced an inordinately volatile set of economic accounts. That is quite against the stated purpose of all this adjusting and statistical intrusiveness; [...]
Personal spending fell slightly in April, making three of the last five months for declines. Such a sustained slump is actually quite rare, and you have to go back to the Great Recession to find anything like it in recent history. There are a few reasons for this now-accumulated downtrend, but it always starts with income. While personal income has [...]
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