Personal Incomes up 0.3% (less than the expected 0.4%)
spending up 0.7% (more than the expected 0.5%)
The economic models are once again wrong. Once again they are to rosy-optimistic.
Once again Americans are making less and spending more than the models projected.
Details to follow
With spending galloping so far ahead of personal incomes, it is not surprising that Americans are not saving.
According to the report
in May of this year Americans socked-away $1T.
in July that number dropped to $836b
in Sept . . . only $688b.
At the current rate, monthly savings will be absolute zero roughly the time you see the Superbowl next year.
Full report here:
https://www.bea.gov/sites/default/files/2023-10/pi0923.pdf
From CNBC
Inflation accelerated in September but consumer spending was even stronger than expected, according to a Commerce Department report Friday.
The personal consumption expenditures price index, which the Federal Reserve uses as a key measure of inflation, increased 0.3% for the month,
The Fed likes “core PCE” inflation because gas and food prices go up and then back down. Except for rare scenarios, Core PCE shows inflation for those items that go up and never come back down.
0.3% PCE inflation in a single month is also known as 3.7% annually
That is 1.8 times as high as the Fed’s target level
and works out to 2 weeks per year you and I work just to pay for inflation.
(Your choice:
zero inflation and you get an additional two weeks off
-or-
work those two weeks, pay more for everything and hope your boss eventually gives you a raise to keep up.)
