Consumer Bites The Dust In First Quarter -

Consumer Bites The Dust In First Quarter

Real personal income rose 0.2% in February but real spending is flat. For 2018, real spending is negative.

The BEA’s Personal Income and Outlays report for February 2018 is negative for first quarter GDP.

Disposable Personal Income (DPI) jumped 0.4 percent in February, but real (inflation-adjusted) DPI rose only 0.2%.

Personal Consumption Expenditures (PCE) rose 0.2% but real consumer spending was flat.

Last month I reported Consumer Spending +0.2% Prices +0.4%: Real Spending Declined 0.1%.

Today we see a negative revision taking January real spending to -0.2%.

The economic illiterates are cheering the rise in inflation. The consumer clearly isn’t.

This was expected behavior, at least in this corner. It’s payback for the fourth-quarter hurricane-related spending spree.

Before anyone gets excited about wages, how is the wage growth distributed? How did the median wage-earner fare compared to consumer prices?

That data is not available yet, but I strongly suspect the median wage earner got hammered.

Two months of the first quarter are in. The consumer is not leading the way as most expected.

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