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Tapped Out US Consumer Makes, Spends Less In October, Real Income Falls For Third Month

Tyler Durden's picture





 

It was only appropriate that on a day in which our chart of the day confirmed that the US consumer is getting increasingly more broke, we got an update of Personal Income and Personal Spending, both of which missed expectations and declined substantially. October income printed at 0.0%, down from 0.4% in September, and below expectations of 0.2%, while spending plunged from 0.8% all the way into negative territory at -0.2%, missing expectations of an unchanged print. Counterintuitively, the spin is that this miss was due to Sandy, when this makes absolutely zero sense: as a reminder Sandy only hit in the last 4 days of October, which means it had no time to impact income, and if anything it prompted an increase in spending as consumers stockpiled ahead of the landfall. But that's why they call it spin. Of course, none of this should come as a surprise: the implied savings rate in September hit a multi-year low of 3.3%, which means going forward the blend of spending and savings will be unpleasant for stocks as consumers have no choice but to rebuild savings once more. And finally, the most disturbing metric, and one which is a red flashing light for all those predicting yet another economic renaissance in 2013, is that real Disposable Income declined by 0.1%: the third decrease in 3 months, confirming that on an inflation adjusted basis the consumer peaked in the summer, and it is all downhill from here.

Personal Savings: finally a modest uptick

 


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Fri, 11/30/2012 - 10:00 | Link to Comment crusty curmudgeon
crusty curmudgeon's picture

Everybody, soon or late, sits down to a banquet of consequences. -Robert Louis Stevenson

Fri, 11/30/2012 - 10:04 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Screw the Laffer curve......just send us your money.

Fri, 11/30/2012 - 10:12 | Link to Comment Baron Robber
Baron Robber's picture

hahahaha the Laffer curve, funny

Fri, 11/30/2012 - 10:17 | Link to Comment vast-dom
Fri, 11/30/2012 - 10:01 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"Scotty, I need more power."

"Aye aye Captain Ben, kicking in QE infinity plus plus in 3....2..."

Fri, 11/30/2012 - 11:13 | Link to Comment Perdogg
Perdogg's picture

I heard Bernacke is getting a new car called the QE Infinity.

Fri, 11/30/2012 - 10:02 | Link to Comment youngman
youngman's picture

I took off my sunglasses...the future does not look that bright...

Fri, 11/30/2012 - 10:05 | Link to Comment knukles
knukles's picture

TPTB gonna go blind playing with their numbers

Fri, 11/30/2012 - 10:06 | Link to Comment knukles
knukles's picture

That came out wrong.....

Fri, 11/30/2012 - 10:06 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Now you can see you're not doin' alright, even though you were gettin' good grades from that crazy teacher who wears dark glasses.

Though, at the very least, 50 thou a year still DOES buy a lot of beer.

Fri, 11/30/2012 - 10:42 | Link to Comment fuu
fuu's picture

$105,527.83 adjusted for inflation over 26 years.

Fri, 11/30/2012 - 10:43 | Link to Comment ebworthen
ebworthen's picture

You need new "iGlasses"; rose colored, hexagon shaped, kaleidoscope glass (and some SOMA).

Fri, 11/30/2012 - 11:30 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Don't masquerade
With the guy in shades, oh-no

Fri, 11/30/2012 - 10:03 | Link to Comment OldE_Ant
OldE_Ant's picture

Those pesky consumers.  How dare they save.

Tapped out, for the quarter, year and probably the decade.

Fri, 11/30/2012 - 10:12 | Link to Comment LouisDega
Fri, 11/30/2012 - 10:04 | Link to Comment knukles
knukles's picture

Hah ha ha ha ha ha
No, the dismal state of the economy is not funny, nor are the machinations the Evil Ones go through to preserve the imagery of normalcy and well being...
Nope, not funny
What is funny, nay appalling and amazing, the extent to which the Fourth Branch of Goobermint goes to attempt to spin the miasma.

Rise Above Everybody!

Booyah motherfuckers

We love Big Brother

Fri, 11/30/2012 - 10:06 | Link to Comment LongSoupLine
LongSoupLine's picture

what does any of this have to do with the fucking bankers getting their bonuses?

Fri, 11/30/2012 - 10:08 | Link to Comment I am Jobe
I am Jobe's picture

What, screw this. Get your Credit Cards out you dumb fuck sheeples and spend on things u don't need. I am sure you have room to pile up more crap and fill the garage and rooms with worthless crap.

Fri, 11/30/2012 - 10:23 | Link to Comment azzhatter
azzhatter's picture

I have been spending a lot lately. In fact I just bought 10 oz of silver before breakfast. Second time this week and an oz of gold. I just can't cut back

Fri, 11/30/2012 - 10:10 | Link to Comment Mark Wilson
Mark Wilson's picture

...and the market yawns.

Fri, 11/30/2012 - 10:13 | Link to Comment buzzsaw99
buzzsaw99's picture

where would I find this "saved money"?

http://www.youtube.com/watch?v=QzE76nUSjL8

Fri, 11/30/2012 - 10:15 | Link to Comment The worst trader
The worst trader's picture

Sandy and Bush's fault.

Fri, 11/30/2012 - 10:17 | Link to Comment CheapBastard
CheapBastard's picture

Wageless, jobless recovery in a Biflatioanry economy--foods energy rising and house values sinking with 0.01% yield on savings and a COLA of 1.6% where REAL inflation is 8%.

Fri, 11/30/2012 - 10:28 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

But it's not "biflation".   There's no such thing.

Real inflation is affecting all prices the same way, pushing them upward.

So why are gas prices rising and home prices falling?  Simple.  There's steady demand for gas, but demand for homes is dropping drastically, negating the upward effect of inflation.

If demand for homes was steady like demand for gas, home prices would be rising like gas prices are rising.

Fri, 11/30/2012 - 10:19 | Link to Comment Dr. Engali
Dr. Engali's picture

Oh lookie here...congress wants to do away with the dollar bill:

 

http://news.yahoo.com/congress-looks-doing-away-1-bill-083418974--politics.html

 

Fri, 11/30/2012 - 11:25 | Link to Comment lakecity55
lakecity55's picture

and, why not? it's only worth 5 cents.

Fri, 11/30/2012 - 11:27 | Link to Comment MilleniumJane
MilleniumJane's picture

Engines on full thrust for multiplated steel coins.  I can't wait until I can tell my grandchildren that when I was alive, once upon a time, we once used coins that were made out of silver, copper and nickel.

Fri, 11/30/2012 - 10:20 | Link to Comment azzhatter
azzhatter's picture

LIESman said it was Sandy. No worries mates

Fri, 11/30/2012 - 10:34 | Link to Comment lizzy36
lizzy36's picture

Sandy is the new Bush.

Fri, 11/30/2012 - 10:21 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

real Disposable Income declined by 0.1%: the third decrease in 3 months, confirming that on an inflation adjusted basis the consumer peaked in the summer, and it is all downhill from here.

True inflation is running 10% -15%.  If consumer spending shows steady on charts, it's really down 10% - 15% adjusted for true inflation.

That's not recession. It's depression.

Just like the Dow, 12,800 today is 7,680 in 2007 dollars. 

Wow, some recovery we're having, took 4 yrs to gain back a thousand points, adjusted for true inflation.

Fri, 11/30/2012 - 10:38 | Link to Comment wonderatitall
wonderatitall's picture

boooooosh!!! romney!!!!   some damn white person somewhere who is entitled to his pay ....racists trying to bring our man down...

oh fuck its over...push this sack of shit country over the cliff please

Fri, 11/30/2012 - 10:28 | Link to Comment ebworthen
ebworthen's picture

Hard to save when income and employment rates are in a decades long decline.

I know! 

Lets allow illegal immigration to lower the wage scale and burden infrastructure.

Let's increase the number of people on food stamps (SNAP/EBT) and offshore productive career employment.

Let's bail out the banks and corporations that thrive on leverage, cost cutting, and parasitic management.

Let's abandon the founding principles of morality, ethics, the rule of law, charity from the locus of the individual and community, and the inverse relationship between personal responsibility and individual liberty.

Genius! (at least from the perspective of the rabidly narcissistic and sociopathic mammon lusters).

Fri, 11/30/2012 - 10:39 | Link to Comment Seasmoke
Seasmoke's picture

If Sandy fucked up October. Just wait until November.

Fri, 11/30/2012 - 11:01 | Link to Comment pokrova
pokrova's picture

Oh, you didn't get the memo for November's headline yet ?  It reads, "November sales hurt by Sandy due to pulling sales forward as people prepared for storm."  Of course, by then people will have forgotten the story line from October, so it should work.

Fri, 11/30/2012 - 10:39 | Link to Comment SheepDog-One
SheepDog-One's picture

Yet the full-retard markets remain near all time highs, any drop recovered fully plus some more within 24 hours....just sick whats innevitably coming.

Fri, 11/30/2012 - 10:44 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

It's a great time to spend. I'm spending green monopoly money like a drunken sailor... on canned food and ammo.

Fri, 11/30/2012 - 11:24 | Link to Comment lakecity55
lakecity55's picture

I'm taking delivery of some Silvertowne products today!

I had 50,000 rounds of ammo, but it was consumed by fire ants.

Fri, 11/30/2012 - 11:35 | Link to Comment 10mm
10mm's picture

Me too.Im close to busting out on the fuckers.They were bailed out,so am I.Fuck em.Now i just keep em clean.

Fri, 11/30/2012 - 10:45 | Link to Comment Mine Is Bigger
Mine Is Bigger's picture

No it's not possible!  They have been telling us consumer sentiment has been improving.  <sarc/off>

Fri, 11/30/2012 - 10:48 | Link to Comment whoopsing
whoopsing's picture

Fumes

Fri, 11/30/2012 - 11:01 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Blah, blah, blah......Dow green.

Fri, 11/30/2012 - 11:03 | Link to Comment skipjack
skipjack's picture

And of course you all realize that "savings" in these numbers includes paying down debt...or defaulting on debt...  Yes, paying your mortgage (or defaulting on it) is nw the new savings.  So what again is being saved ?

Fri, 11/30/2012 - 11:47 | Link to Comment Vince Clortho
Vince Clortho's picture

Absolutely sick.

Paying down the interest on your underwater mortgage is considered "savings"?

Have to wonder what the people of this country would do if they actually understood what is going on.

Fri, 11/30/2012 - 11:14 | Link to Comment Mrmojorisin515
Mrmojorisin515's picture

that because somehow gas was lower in price throughout the summer then the fall, at least in PA it was the case, and thats never the case historically

Fri, 11/30/2012 - 11:33 | Link to Comment edifice
edifice's picture

My salary has nearly tripled in nominal terms, since 2000, but I'm still living the same now as I did then. For me, personally, inflation is running around 20%.

Fri, 11/30/2012 - 11:51 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Yes, dollar has lost about 2/3 of it's value since 2000, so 3 times the salary leaves you about where you were in 2000 purchasing power wise.

Inflation makes higher numbers but not higher wealth. 

People see higher numbers and think they're getting ahead, but they're not.  They might even be losing ground.

Fri, 11/30/2012 - 11:44 | Link to Comment Vince Clortho
Vince Clortho's picture

That chart cannot possibly include inflation.

Fri, 11/30/2012 - 12:30 | Link to Comment katchum
katchum's picture

Disposable income could go even lower with the tax hikes.

Fri, 11/30/2012 - 13:01 | Link to Comment MedicalQuack
MedicalQuack's picture

Ok I'll toss this in here as we go back to "taking care of business" and not the consumer.  I posted this yesterday and we are all probably aware of the excise tax coming in with medical device companies.  I included this video fromthe WSJ where they talk with Medtronic.  Watch it.  I think my readers about had a cow as I put it out there as it is.  We do need medical device companies in the US, they provide jobs, like exactly what they do or not and they do good things and save lives.

Now the excise tax coming, who's going to pay for that..easy..they are going to sell your data to pay their tax bill...aha nobody thinks about this or denies it will happen..sad.  Money has to come from somewhere and for that reason alone I don't want to see them get taxed as they will business overseas too.  Things have changed since the law was written and this one needs a second look. 

Answer to all of this, drop the excise tax on devices and roll it over to the data sellers as this tax is going to create more of them as the device companies use what's already in house as far as data and make money.  The profits are so huge in this and little risk as hire a few geeks, write the algos and format the data and stick out a for sale sign.  Walgreen in 2010 made short of $800 million selling data only, give you an idea on how much money is out there, huge when you bring in banks, high frequency tradings, hedge funds, other companies, social networks..huge! 

http://ducknetweb.blogspot.com/2012/11/one-more-reason-to-repeal-medical...

So why is the consumer so tapped out of money...hmmmm...this is just one example but we don't have a Congress smart enough to see what is fasionably called "the unintended consequences" of decisions.  I tried to get Congress interested in the use of IBM Watson or something along that line as they could all model different formats and this consequence would appear before a law was made, so better thinking and judgement needed.  It won't catch all but it can find a lot of it. 

So in view of this time to jump into bed with the device companies and push to get the data sellers licensed and paying quarterly taxes. 

Fri, 11/30/2012 - 14:12 | Link to Comment Oldwood
Oldwood's picture

We all know that the solution to all of our problems is to tax business. I mean afterall they are the "rich ones" right? Stupid sheep! We tax our businesses and then wonder where the jobs went. US made products cost more and peform worse than imports and its because of greedy rich Americans, yet we see the greatest wealth disparities in our competitor countries. Go figure. Create a population that can only do math on a calculator and still not know what the numbers mean, and preach to them that everything that matters in life is an entitlement or "right" that some nameless invisible rich person will pay for. The government is constantly carving off portions of society with behaviours it deems as undesirable and then proceeds to tax them. You are evil if you smoke or drink or eat or WORK and your attonement is a tax to pay for your sins. Their flaw is that they truely believe that the person who will go out and really bust their ass to get ahead is mentally the same as a drug addict. They think they can virtually tax them 100% and the worker will never stop. All those who are pushing for drug legalization have just created a new collar for government to put around your neck. We ahve all gone from free range to livestock in relatively few years.

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