With all the focus on the unemployment rate, and therefore wages, Economists have been given the luxury (of sorts) of not having to answer for a larger, more basic incongruity. At 4.1% unemployment, supposedly, competition for workers given the scarcity of them who are unattached (low or no slack) should be driving up pay rates. Wages, however, aren’t the only [...]
Real Personal Consumption Expenditures (PCE) rose 0.6% in September 2017 above August. That was the largest monthly increase (SAAR) in almost three years. Given that Real PCE declined month-over-month in August, it is reasonable to assume hurricane effects for both. Across the two months, Real PCE rose by a far more modest 0.5% total, or an annual rate of just [...]
Sometimes economics can be complicated, such as why the labor market has slowed in such lingering fashion since early 2015. Sometimes economics can be easy, such as why there is so much less to the economy this year than thought. The easy part relates to the hard part. The labor market slowed and so did national income. Though so much [...]
One day after reporting a slightly better number for Q2 GDP, the BEA reports today that there is little reason to suspect it was anything more or lasting. The data for Personal Income and Spending shows that the dominant condition since 2012 remains in effect – “good” quarters, or whatever passes for one these days, are the anomaly. There still [...]
For such an important set of data, the PCE stuff continues to suggest a whole lot of capriciousness. There has been a tendency to drastically revise figures such that they change not in the small ways regular revisions are supposed to produce. The whole purpose of especially benchmark revisions is to calculate a more accurate number. In the past few [...]
With inflation tailing off as oil price base effects fade, statistics that turn nominal into real terms will start looking better. Real Disposable Personal Income per Capita, for example, increased in May 2017 at a faster rate than in January. The difference, however, isn’t all that much. The CPI in January was 2.50% and 1.87% in May, but Real DPI [...]
If economists are hoping for more than signs of wage acceleration, revisions to the Personal Income data series are going to make it that much harder to justify still seeing them. Income was revised lower across-the-board. The base effect of oil prices that had been supporting “reflation” may have had the opposite effect on consumers. In common sense terms, consumers [...]
One of the driving forces of populism is this very keen sense of dissonance. We are told one thing only to observe another, with the basis for that first thing being little more than the credentials of the person making the claim. If Janet Yellen proclaims consumer spending as “solid”, we are supposed to take her at her word without [...]
The internals of the GDP report were as ugly as the headline. The major source of weakness was what was supposed to be the sole source of strength – consumers. Real Final Sales to Domestic Purchasers, a measure of all goods and services Americans bought regardless of where they originated, increased by just 1.51% (quarter-over-quarter annual rate) in Q1. That [...]
As oil prices remain as they are in relation to where they were one year ago, measured inflation rates have come back up, some faster than others. This does mimic the real world situation where consumers are paying more now for gasoline than they did last year. Even though they are paying less than three years ago for the same [...]
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