{"id":385,"date":"2010-03-29T18:11:00","date_gmt":"2010-03-29T22:11:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=385"},"modified":"2018-08-20T15:46:25","modified_gmt":"2018-08-20T19:46:25","slug":"the-long-awaited-consumer-spending-figures","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/03\/29\/the-long-awaited-consumer-spending-figures\/","title":{"rendered":"The long awaited consumer-spending figures"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Hello everyone,<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Today saw the release of the long-awaited (by me) February consumer-spending figures.\u00a0 The Commerce Department stated that U.S. consumers increased their spending by 0.3% in February.\u00a0 Meanwhile, personal incomes were flat.\u00a0 So what that means is that people must have increased their spending by reducing savings or by increasing their debt.\u00a0 However, on average, people increased their spending by reducing savings as the savings rate fell 0.3% to 3.1%.\u00a0 Lastly, inflation, as measured by the consumer price index, was up 1.3%.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">So, in summary, consumer spending was up 0.3% which was paid for, not by an increase in wages, but\u00a0by reducing savings and not increasing debt.\u00a0 That 0.3% increase was less than the rate of inflation of 1.3%.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Analysis:<\/strong> As loyal readers of the blog know, I have been nervous about the huge 18% plunge in consumer confidence last month.\u00a0 I have been wondering to what degree consumer spending would match that fall in confidence.\u00a0 Interestingly enough, consumer spending was negative by 1.0% if you figure in inflation.\u00a0 Calculated as:\u00a00.3% increase in consumer spending &#8211; 1.3% increase in inflation = -1.0%\u00a0<em>real<\/em> increase in consumer spending.\u00a0 That is, each consumer has a certain amount of goods and services they <strong>have<\/strong> to buy; like food and shelter.\u00a0 These goods are bought by folks regardless of economic conditions.\u00a0 So for consumer spending to stay even it would have to match the rate of inflation, which it didn&#8217;t.\u00a0 So consumer spending did fall as adjusted by inflation.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">In summary, we have an increase in inflation, a decrease in consumer savings, a\u00a0<em>real<\/em> decrease in consumer spending, and\u00a0flat wages.\u00a0 What&#8217;s more, inflation exceeded all three measures.\u00a0 That means that the U.S. consumer feels more poor now than they did a month ago.\u00a0 These slightly negative statistics\u00a0do not bode well for the economy.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Importance grade:<\/strong> 9\/10; this collection of data are the very most important data in the economy right now next to the unemployment rate.\u00a0 None of the data are either the direction\u00a0(positive or negative)\u00a0or magnitude that investors would\u00a0 prefer.\u00a0 What&#8217;s more, the unemployment rate remains stubbornly high.\u00a0 In other words, the economy is still treading water as measured by its most important measurements.\u00a0 For GDP to be up in the first quarter, ending March 31, it will have to be because of big increases in business investments and government spending.\u00a0 I am guessing that we are going to have tepid growth in GDP.\u00a0 Not good.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hello everyone, Today saw the release of the long-awaited (by me) February consumer-spending figures.\u00a0 The Commerce Department stated that U.S. consumers increased their spending by 0.3% in February.\u00a0 Meanwhile, personal incomes were flat.\u00a0 So what that means is that people must have increased their spending by reducing savings or by increasing their debt.\u00a0 However, on [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-385","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=385"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/385\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}