U.S. consumer spending, trade data signal sluggish growth [INCOME and SPENDING up, INFLATION +0.1%]

Reuters ^ | Mon Mar 28, 2016 | Lucia Mutikani

[expat_panama]

U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens.

Monday's report from the Commerce Department also showed consumer spending in January was not as strong as previously reported. That, together with other data showing a widening in the goods trade deficit in February, indicated economic growth remained sluggish in the first quarter...

...Consumer spending edged up 0.1 percent as households cut back on goods purchases after a downwardly revised 0.1 percent gain in January. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5 percent in January.

When adjusted for inflation, consumer spending rose 0.2 percent...

...In a separate report, the Commerce Department said the advance goods trade deficit widened to $62.9 billion in February from $62.2 billion, rising for a fourth straight month as an increase in exports was offset by a gain in imports.

The government will publish February's trade data, which includes services, on April 5.

In the wake of the consumer spending and trade data, economists slashed their first-quarter gross domestic product growth estimates...

...Inflation moderated last month, with a price index for consumer spending dipping 0.1 percent after nudging up 0.1 percent in January. In the 12 months through February, the personal consumption expenditures (PCE) price index increased 1.0 percent after rising 1.2 percent in January.

Excluding food and energy, prices gained 0.1 percent...

...Consumer spending last month was held back by a 0.7 percent drop in purchases of goods. Spending on services rose 0.4 percent.

Personal income rose 0.2 percent after rising 0.5 percent in January. The slowdown in income growth is likely temporary...

...Households boosted savings to a more than three-year high...

[expat_panama]

Personal Income's up +0.3% and spending's up +0.1% --that means saving's at a new high.

If we say that this is extremely weak growth then we have to say that we're not in a recession, even though we're in about the same situation as 2008 when the inflation adjusted GDP was just 0.001% below 2007's stellar peak ---making 2008 officially a recession --even though fewer people were out of work or part time and even though we were so much better off than we are now.

[bert]

or, the precision of the numbers is beyond the precision of the measurements. The measurements in 0.0 is beyond the actual capability of the process. Anything less than 1% is in my view actually 0

[expat_panama]

Wake up!!   Yesterday the NASDAQ crashed burning down an abysmal -0.1% even while the S&P500 failed to grow any better than a miniscule +0.1%.   Ah, we're basing in fading volume   --never mind.   Our precious metals seem safe too, not going up but at least not falling.

Later this AM: Case-Shiller 20-city Index and Consumer Confidence.

Doesn't Rush always say "politics was invented to keep bored investors awake"?

Why 'Green Energy' Is Just A No-Energy Oxymoron - Alex Epstein, Forbes
Why Investors Will Be Wise To Sit On Cash in '16 - Doug Kass, RealMoney
How Investors Are In Denial About China - Christopher Balding, Bloomberg
What's Missing From This Market Advance? - Kevin Marder, MarketWatch
Signs Your Portfolio Is Headed For a Fall - Martin Pelletier, National Post
Startups Must Choose Profitability v. Humanity - Max Rivlin-Nadler, TNR
Robots Are Coming For Your Job - Bryan Dean Wright, Los Angeles Times
Why Is HK Rich, Cuba Poor, PR Coping? - Richard Rahn, Washington Times
Relentless Attempts to Erase Physical Money - James Titcomb, Telegraph
What's More American Than Inheriting a Fortune? - Bryce Covert, NYT
Sorry Donald, the U.S. Is Very Rich - Robert Samuelson, Washington Post
Look Deeper, Trump's a Pro-Growth Reaganite - Donald Luskin, Investor's

[expat_panama]

...precision of the numbers is beyond the precision of the measurements...

That would be the case if we were say, measuring land.  In the case of measuring the economy my take is that the hard data is close enough that we can fudge and it'll be hard for the opposition to say we're lying.

[bert]

: )

[Wpin]

Deflation pressures...

[Wolfie]

Asher Edelman: We Have Been In A Recession For 15 Years

[yuleeyahoo]

I agree.

[MCF]

“Excluding food and energy”
This is why the whole analysis is meaningless.

[VTenigma]

Personal Income’s up +0.3% and spending’s up +0.1% —that means saving’s at a new high.

---

Or the combined take of the governments share is at a new high.

When Obama’s own economic mouthpiece (Reuters) is lamenting the Fed Gov economic numbers it must really be bad.

[expat_panama]

Personal Income’s up +0.3% and spending’s up +0.1% —that means saving’s at a new high.

Or the combined take of the governments share is at a new high.

Oh goodness --everyone's forgotten to take their happy pills today! Dry those tears and go over this from the official BEA press release:

Personal income increased $23.7 billion, or 0.2 percent, and disposable personal income (DPI)
increased $23.7 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $11.0 billion, or 0.1 percent.  In January,
personal income increased $72.7 billion, or 0.5 percent, DPI increased $57.2 billion, or 0.4 percent,
and PCE increased $10.7 billion, or 0.1 percent, based on revised estimates.

Real DPI increased 0.3 percent in February, the same increase as in January.  Real PCE increased
0.2 percent in February, in contrast to a decrease of less than 0.1 percent in January.

                                        2015                                            2016
                                        Oct.            Nov.            Dec.            Jan.            Feb.
                                                       (Percent change from preceding month)
Personal income, current dollars        0.3             0.3             0.3             0.5             0.2
Disposable personal income:
 Current dollars                        0.2             0.2             0.3             0.4             0.2
 Chained (2009) dollars                 0.2             0.1             0.3             0.3             0.3
Personal consumption expenditures:
 Current dollars                        0.2             0.4             0.1             0.1             0.1
 Chained (2009) dollars                 0.1             0.3             0.2             0.0             0.2

fwiw, "disposable" means "after taxes" and that +0.3% DPI is "real" --after adjusting for inflation.  We need to face the painful fact that real after tax income is up and folks ar saving most of it.  If it hurts to much we can always look at soaring part time work and the shrinking labor force.

[expat_panama]

One of these days you’ll see me banned from the FR because of posts like the one above. Maybe I someday I really need to just make peace w/ the fact that most normal healthy people looove their negative thinking.

[VTenigma]

Does not include state, county, local sales taxes and real estate taxes.

[newfreep]

Is there a website that calculates inflation WITH food and energy?

It’s gotta be over 10%.

[bert]

You mentioned land surveying.....

It was Dr Smirnoff who taught sophomore surveying who embedded the thoughts of measurement precision in my head. When surveying the economy the thought of precision noted in tenths of a percent is to me ludicrous past the point of credibility. To discuss the changes quantified in tenths of a % seems ridiculous.

In my world, economics is an art, perhaps even a black art that has nothing to do with science. Although we have certified public accountants and professional engineers, we have no certified economists

[expat_panama]

Personal Income’s up +0.3% ...   ... the combined take of the governments share is at a new high.

"disposable" means "after taxes"

Does not include state, county, local sales taxes and real estate taxes.

No time to fight now busy day.  On this page you can click on Table 3.3. State and Local Government Current Receipts and Expenditures (A) (Q) to see the details on state and local taxes not incluced in DPI.