Consumer Spending Makes a Comeback
Compared to last May, real consumption expenditures increased last month by 2.6%, which is the highest year-to-year gain since August 2007, 33 months ago (see top chart). For durable goods the annual increase in May was 11.4% compared to last year, following an 11.5% increase in April. The last time consumer expenditures on durable goods increased by more than 11% was in July 2005, and the last time there were two consecutive monthly increases above 11% was in 2002 (see chart above).
These increases in consumer expenditures, especially for "big-ticket items," are consistent with the last week's report on consumer sentiment, which just reached its highest level this month since January of 2008.
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what I have noticed is that total GDP is running now just slightly below the peak of a few years ago.
We always seem to get statistics and charts about the rate of change but rarely see a chart of the total. How is consumer spending now compared to the peak before the recession?
I find it interesting that fewer employees can generate almost as much GDP as the larger number of employees in 2007.
"Consumer Spending Makes a Comeback"
Hmmm, will we need wheelbarrows full of greenbacks to make those purchases though?
Ambrose Evans-Pritchard of the UK Telegraph notes: RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve
Private wage and salary disbursements increased $22.8 billion in May, compared with an
increase of $28.5 billion in April
Government wage and salary disbursements increased $6.6 billion in May, compared with an
increase of $2.5 billion in April. Census decennial temporary and intermittent workers boosted
government wages and salaries by $5.7 billion in May.
so, where does that leave us in the coming months?
ex census etc may increased $11bn less than april.
private income's rate of increase showed a significant slowing. (20% less increase) and absent the census etc the rate of government employee income increase was dropping even more.
i'm not sure how to tease the seasonal adjustment out of this or even if one can make claims as fine grained as i am trying to in light of it,
sorry, hit "publish" too soon
but these data seem to show a moderation in the recovery. sure, it's just one datapoint, but it bears watching. these are surprising slowdowns for a recovery this young.
How much of the spending recovery is caused by not paying mortgages, (Since it appears that mortgage payments are not in the data series in question). If you stop paying your mortgage and start the 12-124 month clock for foreclosure, you have a lot more money for the interim. (Particularly if in a non recourse state where filing bankruptcy is not required after foreclosure, all be it that living high on the hog does not leave much left in the till, so eat drink and be merry!)
I find it interesting that fewer employees can generate almost as much GDP as the larger number of employees in 2007.
I don't think that's the case -- an extra $trillion in government spending can make it look that way, though.
.S. consumer confidence fell steeply in June after rising for three months, due to worries about the labor market because of a recent slowdown in jobs growth, according to a private sector report released Tuesday.
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The Conference Board, an industry group, said its index of consumer attitudes fell to 52.9 in June from a downwardly revised 62.7 in May.
The June figure was sharply below the median of forecasts from analysts polled by Reuters, which was for a reading of 62.8 with forecasts ranging from 59.5 to 65.5.
The May reading was revised down from an original 63.3. The expectations index fell to 71.2 from 84.6 in May. The present situation index fell to 25.5 from 29.8 in May. Consumers' assessment of the labor market worsened.
The "jobs hard to get" index rose to 44.8 from 43.9, while the "jobs plentiful" index slipped to 4.3 from 4.6 in May.
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