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Post by jeffolie on Jul 31, 2007 10:58:39 GMT -6
US consumer spending slows By Eoin Callan in Washington Tue Jul 31, 9:45 AM ET US consumer spending rose at the slowest pace in nine months in June in a sign of cooling household demand. Spending rose 0.1 per cent after a gain of 0.6 per cent the previous month, according to the Commerce Department. The slowdown is likely to be a source of concern for policymakers, although many economists expect consumer spending to hold up amid strong hiring and rising incomes. Incomes rose 0.4 percent in June for the second month, according to the report, slightly less than economists were expecting. Consumer spending accounts for more than two-thirds of the economy but has been replaced as the main driver of growth in recent months as business activity picks up. The Federal Reserve's preferred gauge of inflation rose less than forecast, increasing 0.1 per cent for the fourth straight month. The core personal consumption expenditure index - excluding volatile food and energy prices - was up 1.9 per cent from a year ago, the smallest increase in three years. news.yahoo.com/s/ft/20070731/bs_ft/fto073120071003007129;_ylt=AlLiIDZ0.bFWPB2WPIDz_Jqs0NUEThis is the indicator to watch. It is the 800 pound gorilla.
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Post by unlawflcombatnt on Jul 31, 2007 14:16:39 GMT -6
Consumer spending definitely has stalled. Real Personal Consumption Expenditures actually decreased slightly for June, according to the today's Personal Income report from the Bureau of Economic Analysis. Today's Personal Income report from Briefing.com showed a monthly increase of +0.4% in current dollars. In real dollars ("chained 2000 dollars"), the increase was only $23 billion, or +0.27%. (from the BEA report). However, June was the only month in the 2nd quarter where real Disposable Personal Income (DPI) actually increased. Both April and May showed declines. April showed a decline of -49.6 billion while May declined -6.6 billion. The cumulative decline in real DPI for the 2nd quarter was -17 billion (-0.2%), from $8,633 billion down to $8,616 billion. For June, the change in real Personal Consumption Expenditures was almost -0.1%. All of the 2nd quarter consumer spending increase was financed through borrowing and credit, as Disposable Personal Income actually declined for the quarter. Clearly this is not a sustainable course. This is especially true given that credit and borrowing are now contracting. Given that Consumer Spending is now 70% of GDP, a significant decline will sink the economy and put us into a recession (assuming we're not in one already). The 2nd half of 2007 is going to be rough.
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Post by blueneck on Aug 1, 2007 5:03:02 GMT -6
Its funny how on all the network knews and punditry shows they keep touting that consumer confidence is UP
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