American Spending Grows Faster Than Income For 29th Straight Month

For the 29th month in a row, Americans annual spending grew faster than their incomes as the ‘no consequences’ new normal rolls on, leaving the savings rate languishing near record lows – even if it did very modestly uptick in May.

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29%20%281%29.png?itok=bwoEgyRC

Year-over-Year income growth reached 4.0% – the highest since Nov 2015; while YoY spending growth stalled at 4.4%.

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29_5-34-14.jpg?itok=Ph_kfSrR

Income growth was dominated by private workers seeing another uptick…

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29%20%282%29.png?itok=Rji2MdxX

On the month, personal incomes grew 0.4% (as expected) – the fastest rate since Dec 2017.

However, for the second straight month, month-over-month spending growth disappointed – rising just 0.2% MoM vs +0.4% expectations.

But the growth in both continues.

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29.png?itok=7iTNQJ3N

The PCE Inflation data came in a little hotter than expected – rising at the fastest since March 2012…

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29_5-40-35.jpg?itok=Y55EoCM4

As a reminder, the vast gap between extreme high confidence and extreme low savings rate – a borrow-my-way-to-happiness narrative – has never ended well in the past…

https://www.zerohedge.com/sites/default/files/inline-images/2018-06-29_5-26-44.jpg?itok=0goOTI__

Remember, nothing lasts forever – ask the German soccer team.

Source: ZeroHedge

Advertisements