In February headline data for income modestly beat expectations (+0.2% MoM vs +0.1% MoM) and spending met expectations at +0.1% MoM respectively. However, income growth YoY slowed to 4.0% – near its weakest since Nov 2013. Spending growth also slowed to +3.8% YoY (from 2.9% in Jan) but the big story is the major downward revisions in spending. January’s +0.5% ‘surge’ in spending was revised to a mere +0.1% trickle – the weakest in over a year.
Since QE3, income growth has been a one way street lower…
And January’s “surge” in spending has magically disappeared:
The spending and income data in context:
This means that the worst case scenario for the Fed is materializing: Americans are savings away increasingly more of their incomes, at least according to the latest revision, which has seen the US personal savings rate jump to 5.4%…
… matching the highest since the dramatic 2012 year-end revision which saw the savings rate slashed from around 7.5% to the upper 4% range:
And with this revision, Q1 GDP of 1.4% (per the Atlanta Fed) is about to be revised to 1.0% or lower. Still what does anyone care about the reality of a collapse in real economic data? We have Bullard to keep markets afloat.
via Zero Hedge http://ift.tt/1ogtCZU Tyler Durden