Submitted by Tyler Durden on 02/01/2016 08:39 -0500
The Keynesians will not be pleased. Despite the holiday season, December spending disappointed with no change MoM (0.0% vs +0.1% exp). This is further sentiment-destructive as income data rose more than expected MoM (+0.3% vs +0.2% exp) even as income growth YoY slipped to its weakest in 9 months.
Perhaps most sadly of all, 42% of December Personal Income gains came from Government Social Benefits, mostly Social Security and Medicare. Vive le recovery.
Spending on Goods, both durable and non-durable, tumbled by $34.6 billion offset by $33.9 billion jump in spending on services.
Widening the gap…
This of course means the personal savings rate rose, pushing to 5.5% – the highest since 2012.
Not what the PhDs in The Eccles Building are demanding or their textbooks are predicting.
Charts: Bloomberg
http://www.businessinsider.com/lost-decade-for-the-us-economy-2016-1
So why do so few Americans have any significant savings at all?
Most can’t go even a single year of no income without borrowing or begging money (or ending up on the street).
KaD…..not only did Obamacare non-productive consumer COSTS get added to boost GDP, but GDP itself , but on July 31, 2013, Expenditures for research and development (R&D) and for entertainment, literary, and artistic originals were added to boost GDP.
This latter part was derived from the 2008 SNA (System of National Accounts). There were other changes to boost GDP in the SNA rollout.
All non-productive – all Bullshit.