Tag Archives: consumer

Income Continues to Outpace Spending

Real disposable income surged 0.9% in January, extending gains that we saw at the end of 2014. Improving labor market conditions, combined with a pickup in average hourly earnings (driven in part by increases in the minimum wage) and plummeting prices at the gas pump enhanced

Inventories Less of a Problem in Fourth Quarter

Real GDP was revised down to 2.2% in the fourth quarter from an initial estimate of 2.6%. A sharp downward revision to inventories was the primary reason for the revision, which leaves less of an overhang for producers to drain in early 2015. Imports were also revised up, reflecting the phenomenal strength of consumer spending

Retail Sales Disappoint

Retail sales dropped 0.8% in January, due in part to yet another sharp decline (9.3%) in gasoline station sales, as prices at the gas pump continued to plummet. Big-ticket spending on vehicles, furniture and appliances also slackened from the pace we saw in December.

Trade Deficit Balloons

The U.S. trade deficit unexpectedly widened to $46.6 billion in December from $39.8 billion in November. The data for November were revised to show a slightly larger deficit than was initially reported. Exports fell, while imports picked up a bit. Much of that shift was concentrated in trade with Canada and Mexico,

Consumers are in the Driver’s Seat

Real GDP rose a smaller-than-expected 2.6% in the fourth quarter largely due to a surge in consumer spending, which was at least partially offset by a larger-than-expected increase in imports. (Imports subtract from overall GDP growth.) The gains in consumer spending reflect recent increases in employment, incomes and the drop in prices at the pump.

Durable Goods Orders Decline

Durable goods orders unexpectedly dropped 3.4% in December following data revised downward for November; that marks the fourth decline in five months. Headline data were weighed down again by transportation equipment, which has been struggling in recent months.  Even the new orders ex-transportation show a decline of 0.8%. Looking at core capital goods (the best indicator [...]

CPI Runs Hotter than PCE Inflation Index

The Federal Reserve prefers to use the Personal Consumption Expenditures (PCE) index of inflation because PCE is more accurate; it better captures the trade-offs that consumers make when prices shift across sectors in the economy. The chart below is proof of the positive effect of plummeting oil prices in surging consumer sentiment. Low prices at at the [...]

Consumer Price Inflation Falls

The Consumer Price Index (CPI) dropped 0.4% in December, the largest drop since 2008, in large part due to plummeting oil prices. Energy prices outside of the oil and gasoline sectors, however, posted mostly increases, which look to be transitory and will retreat as we move into January. Prices for food moved higher and, outside [...]

Falling Oil Prices Reduce Trade Deficit

The trade deficit narrowed more than expected again in November, with imports dropping more than exports. A fall in oil imports, due to the sharp drop in energy prices we have seen in recent months, was the primary reason for weakening imports. Exports were hurt by a drop in aircraft shipments,

Personal Incomes and Outlays, Home Prices Strong

Personal Incomes and Outlays Personal income and expenditures both gained in November, with incomes growing 0.4% and expenditures up 0.6% after both were revised up in October. The Personal Consumption Expenditures (PCE) price index decreased 0.2%, while core PCE increased less than 0.1%. That price movement bodes well for consumers this holiday season as shoppers [...]