The consumer is still strapped. The Commerce Department posted its data for September’s personal income and spending, and frankly it almost makes you question yesterday’s GDP data. The report showed that Personal Income was unchanged in September, but showed that Spending was down by -0.5%. Dow Jones and other consensus data were looking for figures to be largely unchanged. The drop in spending appears to the worst reading this year, but there is a silver lining… with no income rise there is that much less fear of a heating inflation tea kettle.
One issue to consider here is that August spending was revised higher to 1.4% from 1.3%. And August income was revised to 0.1% from 0.2%. One positive items for tomorrow rather than today is that savings rose to 3.3% of disposable income from 2.8% in August. As one in ten are out of work and other 6 or 8 in 10 are underemployed, it seems as though very little in this report could be deemed as heating up or very inflationary.
There is nothing hot about these numbers. And it might make some question just how high that Q3 GDP report came out yesterday, assuming you try to compare oranges to tangerines.
JON C. OGG
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