It's The Economy Stupid: Big Day, Lot's of Economic Stuff

It’s a big day today, there’s lots of economic stuff that reported today. 

 

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Employment Cost Index	2Q A	0.5%	0.5%	0.4%	0.3%
Personal Income	JUN	0.4%	0.5%	0.2%	-0.1%
Personal Spending	JUN	0.1%	0.0%	0.0%
PCE Deflator MoM	JUN	0.0%	0.1%	-0.2%
PCE Deflator YoY	JUN	1.7%	1.5%	1.5%
PCE  Core MoM	JUN	0.2%	0.2%	0.1%
PCE Core YoY	JUN	1.8%	1.8%	1.8%
S&P Case Schiller 20 City MoM	MAY	0.4%		0.7%
S&P Case Schiller Composite YoY	MAY	-1.5%		1.9%
S&P Case Schiller Home Price Index	MAY	137.55		135.8
Chicago Purchasing Manager	JUL	52.4		52.9

 

Employment Cost Index was up slightly, that ain’t bad.

Personal Income was up 0.5%, that’s a good thing (I always like a little more money in my pocket).

Personal Spending was ZERO PERCENT, reflecting the slowdown in consumer spending that businesses are feeling.

 

So, consumer incomes are increasing slightly, consumer spending has stopped increasing, and savings are increasing.  Doesn’t sound like confidence in the economy to me.

 

 

By Shobhana Chandra

     July 31 (Bloomberg) -- Consumer spending in the U.S.

stagnated in June as Americans used the biggest gain in incomes

in three months to boost savings, indicating a weak handoff to

the second half of the year.

 

     Household purchases, which account for about 70 percent of

the economy, were unchanged after a 0.1 percent decrease the

prior month that was previously reported as little changed, a

Commerce Department report showed today in Washington. The median

estimate in a Bloomberg News survey of economists called for a

0.1 percent rise. Incomes rose 0.5 percent, lifting the savings

rate to 4.4 percent, the highest in a year.

 

     The results may raise concern limited job prospects are

causing Americans to pull back at the same time business

investment is cooling and the European debt crisis has triggered

a slowdown in overseas markets. Federal Reserve policy makers

meet today and tomorrow to determine whether more monetary

stimulus is needed to shore up an economy that’s slowed for two

straight quarters.

 

     The Bloomberg survey median called for incomes to rise 0.4

percent in June. Wages and salaries climbed 0.5 percent after a

0.1 percent gain. The 0.3 percent gain in May was revised up from

0.2 percent.

 

    The saving rate increased from 4 percent.

 

    Disposable income, or the money left over after taxes,

increased 0.3 after adjusting for inflation. It rose 0.5 percent

in the prior month.

 

     The June results indicate the consumer was losing steam as

the quarter drew to a close. Household spending rose 1.5 percent

from April through June, the slowest pace in a year, Commerce

Department data showed last week. Gross domestic product climbed

at a 1.5 percent annual rate, cooling from a 2 percent pace in

the prior three months.

 

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury