Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Economy on Soft Trajectory as Consumer Spending Falls

Economics / US Economy Aug 01, 2012 - 03:49 AM GMT

By: Asha_Bangalore

Economics

Best Financial Markets Analysis ArticleReal consumer spending declined 0.1% in June, after posting gains of 0.2% and 0.1% in April and May, respectively. Outlays of durable goods and services held steady in June, but that of non-durables fell 0.4%. We can discern the causes for a drop in consumer non-durables when the Commerce Department publishes complete details of consumer expenditures on Friday, August 3. More importantly, the level of real consumer spending in June ($9576 billion) is lower than the second quarter average ($9582 billion), which sets up the case of strong monthly gains in consumer spending in the third quarter if consumer spending has to make a noticeable contribution to real GDP. There are doubts about a strong trajectory of consumer spending in the second-half of the year, given the current worrisome labor market situation.


Personal income rose 0.5% in June, reflecting a 0.5% increase in wages and salaries. Real disposable income advanced 0.3% in June, putting the year-to-year gain at 1.7%. The reversal of the weak trend in real disposable income in the four months ended June is noteworthy.

Saving as a percentage of disposable income increased to 4.4% in June, the highest reading since June 2011. The upward trend of saving and disposable income suggests that consumers have become less willing to spend and are focused on building their net worth.

The personal consumption expenditure price index (+0.1% mom, +1.5% yoy) and the core personal consumption expenditure price index (+0.2% mom, +1.86%, yoy) are well within the Fed’s inflation target of 2.0%. Essentially, inflation measures are non-threatening and do not present a problem at the FOMC deliberations today and tomorrow (see Chart 4).

In related economic news, the Conference Board Consumer Confidence Index rose to 65.9 in July from 62.7 in the prior month. Among the two major sub-components of the index, the Present Situation Index (46.2 vs. 46.6 in June) fell, while the Expectations Index (79.1 vs. 73.4 in June) advanced. The difference between the “jobs hard to get” measure that of “jobs plentiful” index, has a strong correlation with the jobless rate widened slightly in July (33.0 vs. 32.9 in June) implying that the jobless rate could be higher than 8.2% in July.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2012 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in