November Disposable Income, Durable Goods Soar: Sandy's Fault?
Something funny happened on the way to another "it's all Sandy's fault" justification for economic data misses today: it flipped. Because while in November, Personal spending was expected to surge above personal spending (which printed up 0.4%, in lined with expectations), instead what the BEA - best known for producing such accurate series as the US GDP - reported is that Personal Incomes soared by a whopping 0.6% in November, double the expectations and compared to a 0% print in October. The reason? "Private wage and salary disbursements increased $41.1 billion in November, in contrast to a decrease of $16.3 billion in October. The October decrease in private wages and salaries reflected work interruptions caused by Hurricane Sandy, which reduced wages and salaries by $18.2 billion at an annual rate." And the stunning data did not end there: real Disposable Income soared by a whopping 0.8% following a drop of -0.1% in October. As the chart below shows, this was the biggest monthly surge in Real Disposable Income in years. The result of all this is that savings, which would have otherwise dropped to a fresh 5 year low, rose to 3.6%. And concluding the wonderful data in the month when the impact of Sandy was to be most acute, we got Durable data, which blasted through the roof, if only on a Seasonal Adjusted basis: with Durable Goods rising 0.7%, on expectations of 0.3%, and the last month revised from 0.0% to 1.1%, while Capital Goods orders non-defense ex-aircraft surged 2.7% on expectations of an unchanged print (with the highest expectation being 1.0%), with the last one revised from 1.7% to 3.2%. (Of course, non-seasonally adjusted durable goods data plunged but who's counting).
So... more hurricanes? Also, does this mean the unemployment print for December will be 7% and just 0.5% away from QE ending (/jk).
Read Disposable Income:
US Capital Goods orders non-defense ex-aircraft: the Sandy-renaissance in October and November is unmissable.