For the 26th straight month, US spending growth has exceeded income growth.
Both income and spending were in line with expectations but the much-watched PCE Deflator was a little hot (+1.8% vs 1.7% exp) at its highest in 11 months.
Which meant that Real Personal Spending was unchanged in February, after dropping 0.2% in January!
The biggest two-month drop since the financial crisis!
However, for the 2nd month in a row, the savings rate upticked (from 3.2% to 3.4%), as perhaps a new frugal normal is dawning in America…
And as we noted previously, the previously systemic slump in savings (as desperate Americans try to maintain their standards of living) has been met with near-record optimism…
Something that never ended well in the past. And judging by the “buying plans” of Americans (from the recent Conference Board survey), things may have hit the tipping point…
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