The consumer is back baby. The MSM is gaga over the “surge” in August spending, driven by subprime 7 year 0% auto loans to pimps and hos in West Philly. Maybe the University of Phoenix dropouts are using their student loans to buy iGadgets and bling. Here is a link to the “fantastic” data:
I just can’t help myself. Let me take a look at the data and give you a few FACTS you may not see in the MSM spinfest:
- Real disposable personal income, using the fake BLS inflation numbers, is up a HUGE 1.6% in the last year. In reality, using inflation numbers from the real world, real disposable income has declined. This is consistent with the FACT that retailers are reporting negative or flat comp store sales.
- Real disposable income per capita was up an even more pathetic 1% in the last year, as the country’s population grew by 2.2 million people.
- To give you some perspective on how the average person (not a Wall Street asshole) has progressed in the last five years, the real disposable personal income per person in May of 2008 was $37,584. Today it is $36,357. The average American, after the four year Obama recovery, has 3.3% LESS disposable income.
- Americans have been forced to REDUCE their savings by $22 billion in the last year to just make ends meet in this fantastic economy. Three cheers for a near record low savings rate.
- Personal income is up $500 billion in the last year, but in this warped Orwellian world we live in, only 50% of this is generated by wages paid by businesses to workers. The $2.4 trillion per year taken out of your pocket or borrowed from future generations and handed out to the non-producers in this country is hysterically counted as personal income.
- You’ll be thrilled to know that dividend income paid to the .1% is up by $71 billion in the last year, while interest income paid to senior citizens and savers is virtually flat and down $150 billion since August 2008. Over this time, Bernanke has stolen over $400 billion from savers and handed over to his puppet masters on Wall Street.
- Great news for Obama and the government drones in DC. They have sucked $172 billion more in taxes from you compared to last year. Bye Bye payroll tax cut. I’m sure they’ll put the money to good use funding more IRS agents to enforce Obamacare.
- The American consumer is back. Their disposable personal income was up $336 billion in the last year and they spent $359 billion of that. Oops!!! How long can you continue to spend more than you have? I guess we’ll find out.
Good bye from the NO SPIN zone. I hope you liked my daily dose of reality.
Consumer spending bounces back in August
Faster pace of outlays suggests economy hasn’t slowed all that much
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Consumers opened up their wallets in August and spent more in July than previously reported, suggesting that U.S. growth might not soften quite as much in the third quarter as economists had forecast.
Consumer spending rose a seasonally adjusted 0.3% last month, marking the third-fastest increase of the year, the Commerce Department said Friday. And spending in July rose twice as fast as initially estimated –— 0.2% instead of 0.1%.
Economists surveyed by MarketWatch had forecast a 0.3% increase in consumer spending and a 0.4% rise in personal income.
The larger increase in incomes allowed Americans to salt away a bit more cash. The savings rate of Americans rose to 4.6% from 4.5%. The savings rate, however, hasn’t topped 5% since late last year.
Consumer spending represents as much as 70% of the U.S. economy and is the biggest influence on growth. The bounce-back in spending could generate faster growth in the third quarter than economists had been expecting. Gross domestic product is forecast to rise 1.9%, down from 2.5% in the second quarter, according to the latest estimates.
Consumers boosted purchases of autos in August to the highest rate in more than six years, and the month is always big for back-to-school purchases. Americans spent more on durable goods and services, but purchases of everyday items was basically unchanged.
Inflation, meanwhile, edged up 0.1% in August based on the latest reading from the personal consumption expenditure price index. The core rate, which omits food and energy, rose a slightly faster 0.2%.
Both PCE indexes have risen a scant 1.2% over the past 12 months, indicating that inflation remains contained. That gives the Federal Reserve the room to continue its a massive bond-buying program meant to stimulate the U.S. economy.
The Fed surprised Wall Street earlier this month by maintaining its current rate of purchases. A big reason was the apparent slowdown in economic growth and hiring toward the end of the summer.
Yet a slew of recent indicators, including the consumer spending report, suggest the economy has not slowed all that much from the spring. The U.S. grew at a 2.5% rate in the April-to-June period