Spending On Services Jumps By Most Ever As Incomes Disappoint, Savings Rate Near Five Year Lows

Tyler Durden's picture




 

Despite expectations that following several months of subpar income growth offset by rampaging spending and thus a plunging savings rate, March incomes would rise by 0.4%, while spending would be flat, this did not happen, and instead both spending and incomes rose by the same amount, or 0.2% in the past month. Worse, when adjusting for inflation, real disposable income rose just 1.1% compared to last March, and just barely above the 0% breakeven. On the other side, real spending was up 2.2% Y/Y just barely above the 2% recessionary threshold. And even that number is misleading as spending on Total Goods (including durable, already known as being quite abysmal, and non-durable), dropped by $32.8 billion in nominal dollars. What was the offset? Why a massive surge in consumption expenditures on services, which rose by $53.8 billion, which absent the spending aberation for September 11, 2001, which was reversed in the following month, was the biggest monthly increase on record! What drove this record services spending spree is anyone's guess. 

Durable Goods spending- down:

Non-Durable spending- also down:

... but Services Spending- up, up, up... Record up in fact:

Real disposable income: oops.

Finally, since both spending and income rose at the same pace, the personal savings rate was flat from February, or at 2.7%: just barely higher than the 5 year low of 2.2% posted in January. In other words consumers continue to be tapped out, and it is unclear where the income spurt will come from to drive the much needed spending surge in the coming months. Oh yes, Bernanke's trickle down magic of course. How could we forget.

And if everything else fails, the Fed, tired of monetizing debt, can just step in and start buying goods and services. After all what better way to truly goose the US economy than by outright monetizing not securities but actual inputs into the GDP equation...

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Mon, 04/29/2013 - 09:10 | 3509585 MFLTucson
MFLTucson's picture

This is part of a comedy act, right?  Incomes down and people re buying more services?  Makes perfect sense in a world of make believe.

Mon, 04/29/2013 - 09:10 | 3509588 Bearwagon
Bearwagon's picture

"Here's to stinkin' rich!! Yea!! Stinkin' rich!!"

Mon, 04/29/2013 - 09:18 | 3509617 kliguy38
kliguy38's picture

No....here's to your masters that have been behind the curtain for your entire life making you believe there is a left/right paradigm that you ROOT for.......so go ahead and pick a side......hehheheheehe......pick it!!!.....because whether you pick curtain 1,2,or 3......its all the SAME poison......so go ahead pick your "side"...btw the "stinkin" rich are relative..... a multi millionaire to these guys is "DIRT".....a billionaire is just another dirtball.  

Mon, 04/29/2013 - 09:22 | 3509635 Zer0head
Zer0head's picture

services..

you mean like energy bills from your local utility that recently installed smart meters along with time of use price increases or could it be that monthly bank statement with its no fee checking for a paltry $25/mth - is iTunes part of services or that 3 year contract with your mobile provider

Mon, 04/29/2013 - 09:35 | 3509684 ihedgemyhedges
ihedgemyhedges's picture

Services refers to bankruptcy/divorce attorneys, short sale real estate agents, strippers, etc.......

Mon, 04/29/2013 - 09:52 | 3509731 Stoploss
Stoploss's picture

Don't forget labor services..

No one pays any attention to this but, your local electrician, plumber, HVAC, etc, per hour labor charges generally go up in lockstep with food and energy costs.

A very simple rule of thumb to detect inflation at the bottom level is to watch services labor rates.

All this is, is the reflection of the inflation manifested as higher labor costs to consumers giving the illusion that funds are being spent on services, when in fact what is happening is that the consumer is simply being ripped off.. 

Labor services rule, always have and always will.  If you want your water heater put in and brought up to code cheaper, do it yourself.

Mon, 04/29/2013 - 09:49 | 3509732 espirit
espirit's picture

Discretionary spending rose YoY? 

What koolade are the statisticians drinking?

Mon, 04/29/2013 - 10:26 | 3509825 kentfinance
kentfinance's picture

and tax returns. seasonal jumps in march?

Mon, 04/29/2013 - 10:31 | 3509838 Dapper Dan
Dapper Dan's picture

Smart Meters came first, now comes the technology to interface with meter. all part of the plan.

The installer of my smart meter told me it would save me money. 2 years later, still no savings.

 

 

Big brother to switch off your fridge: Power giants to make millions - but you must pay for 'sinister' technology
  • Computer chips will take control of home appliances when energy is low
  • Sensors will detect spikes in demand for power and when grid struggles to meet it, will temporarily shut off appliances
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Read more: http://www.dailymail.co.uk/news/article-2315863/Big-brother-switch-fridge-Power-giants-make-millions--pay-sinister-technology.html#ixzz2RrTMyG55
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Mon, 04/29/2013 - 11:08 | 3510062 Miffed Microbio...
Miffed Microbiologist's picture

Why did you let them install a smart meter?? A guy came to my house and knock on my door stating he was there to install this wonderful smart meter. I told him I didn't want it and to get the fuck of my property. He stared at me in shock and went into some long speal how wonderful it was. I repeated myself in stronger tones and pointed out he was eliminating he own job as a meter reader. This guy looked at me like I was crazy but finally left stating I was going to pay more in monthly fees by not installing it. I have solar and pay about $50/ year to San diego gas & electric so having independence is worth far more to me than their shitty fee. God, don't give them more control than they already have!

Miffed;-)

Mon, 04/29/2013 - 09:23 | 3509642 Bearwagon
Bearwagon's picture

"pick it!!!" ... Hm ... okay, I'll pick up my ball and go home ...    ;-)

(edit: By the way: the "Stinkin' rich" is a quotation from the movie "Time Bandits")

Mon, 04/29/2013 - 09:16 | 3509618 francis_sawyer
francis_sawyer's picture

So I guess the price for hookers & coke just went up...

Mon, 04/29/2013 - 10:14 | 3509779 espirit
espirit's picture

Hehe, matrix metrics - bitchez.

Mon, 04/29/2013 - 10:30 | 3509846 ihedgemyhedges
ihedgemyhedges's picture

Don't know about coke. Never touched it. But high end hooker ass is in high demand and commands a premium price. Or, so I've been told....

Mon, 04/29/2013 - 10:43 | 3509899 DosZap
DosZap's picture

Don't know about coke. Never touched it. But high end hooker ass is in high demand and commands a premium price. Or, so I've been told....

Who's got the coins to pay high end hookers?.

Never saw a woman I would pay for sex.Some hard UP morons running around.(must be the Depressed).

Mon, 04/29/2013 - 10:21 | 3509814 insanelysane
insanelysane's picture

The poor?

"Oh you must meet them. I'm sure you'll like them. Of course they haven't got two pennies to rub together but that's because they're poor."

Mon, 04/29/2013 - 09:19 | 3509621 Sudden Debt
Sudden Debt's picture

Service sector : http://www.google.nl/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&ved=0CDgQFjAA&url=http%3A%2F%2Fwww.orientalbeauty-ny.com%2F&ei=c3J-Ud_qE8i0PL3BgPgI&usg=AFQjCNGpdaHcc-2jMGpwlElWUzuESfsc6A&sig2=akwJoawkyCLdaVq822QHIg&bvm=bv.45645796,d.ZWU

looks like the asians also took over the service sector in America...

AND IT'S DURABLE BECAUSE YOUR LEFT WITH SOME NASTY SHIT FOR THE REST OF YOUR LIFE!!

Mon, 04/29/2013 - 09:22 | 3509624 TeamDepends
TeamDepends's picture

Yeah, remember 9/10/01?  Rummy Rumsfeld:  Whoopsie, there are 2.3 Trillion $ missing from the Pentagon budget....

Mon, 04/29/2013 - 09:28 | 3509660 Sudden Debt
Sudden Debt's picture

.... dude... everybody has lost at least once in his lifetime his wallet.... Rummy did it also and everybody keeps blaming him...

 

Mon, 04/29/2013 - 09:32 | 3509685 TeamDepends
TeamDepends's picture

Maybe deep in the bowels of the Pentagon they already have trillion dollar coins?  But how would you lose .3 of one?

Mon, 04/29/2013 - 12:24 | 3510359 sbenard
sbenard's picture

PEOPLE SPENT THEIR TAX REFUNDS! WHOOP-DEE-DOO!

Mon, 04/29/2013 - 09:10 | 3509586 GetZeeGold
GetZeeGold's picture

 

 

We need a strapping young socialist muslim to get us through this.

Mon, 04/29/2013 - 09:10 | 3509596 MFLTucson
MFLTucson's picture

Anyone see the jobs bill amonst the gun, gay and abortions headlines?  

Mon, 04/29/2013 - 09:21 | 3509606 GetZeeGold
GetZeeGold's picture

 

 

Not really. I think the number of poeple that actually care about jobs is only like 4%.

Mon, 04/29/2013 - 09:20 | 3509628 Sudden Debt
Sudden Debt's picture

YES!!!

THOSE GUN CONFISCATIONS BY DOOR TO DOOR RAIDS WILL CREATE JOBS!!

Mon, 04/29/2013 - 09:49 | 3509720 TeamDepends
TeamDepends's picture

Yeah, for the people who put the fun in funeral.  (Thanks Cleveland)

Mon, 04/29/2013 - 09:11 | 3509598 Baader
Baader's picture

No, your Foreign Policy is enough in this regard.

Mon, 04/29/2013 - 09:13 | 3509604 spankthebernank
spankthebernank's picture

an emaciated, nicotine addicted sociopath NWO'er you mean?

Mon, 04/29/2013 - 09:30 | 3509670 Miss Expectations
Miss Expectations's picture

What do you mean strapping...is that some sex thing?

Mon, 04/29/2013 - 10:40 | 3509882 DosZap
DosZap's picture

What do you mean strapping...is that some sex thing?

That's what Bawney Fwank gets, except he gets real meat.

Mon, 04/29/2013 - 09:10 | 3509593 vote_libertaria...
vote_libertarian_party's picture

I think the services spending surge must have been DC lobbyists getting overtime trying to get their clients off of the sequester cuts list.

Mon, 04/29/2013 - 09:21 | 3509629 francis_sawyer
francis_sawyer's picture

The sequester is a joke...

~~~

If Obama was serious about getting things under control, he'd have appointed a 'CHEESE CUTTING CZAR' by now...

Mon, 04/29/2013 - 10:26 | 3509826 insanelysane
insanelysane's picture

Still waiting for them to cut the $500b/yr in fraud and abuse in Medicare that they promised to do once Obamacare was signed those many years ago.  Any day now, I'm sure.

Mon, 04/29/2013 - 10:56 | 3509983 francis_sawyer
francis_sawyer's picture

Cheese Cutting Czar... It's the only hope... I'm surprised that idea hasn't crossed the teleprompter yet...

Mon, 04/29/2013 - 09:14 | 3509605 Yes_Questions
Yes_Questions's picture

 

 

TAX returns?

Ammo Broker Finder Fees?

Mon, 04/29/2013 - 09:15 | 3509608 Ancona
Ancona's picture

Looks like I'm not the only one who is broke-as-a-joke.

I keep watching prices go up year after year after year, while my salary remains static, or as was the case in 2009, I am asked to take a pay cut "for the good of the company". I was a good soldier and took the cut, yet have not seen a raise since then.

Recovery? What recovery?

Mon, 04/29/2013 - 10:25 | 3509818 MilleniumJane
MilleniumJane's picture

Yep, no cost of living raise for me after almost 5 years.  No recovery at all for my household.  Seems TPTB have redefined recovery as "You Have a Job.  Now Get Back to Work" or "You Have SNAP.  Now Suck It."

Mon, 04/29/2013 - 13:04 | 3510473 RKDS
RKDS's picture

Same here.  Can't even get a raise in the public sector these days.  Yet, somehow, taxes keep going up.  I fear the rich are like my first cat; they won't stop eating until they explode.

Mon, 04/29/2013 - 09:16 | 3509612 kito
kito's picture

services up?? here is the reason:

 

http://news.yahoo.com/silicon-valley-prostitution-boom-different-others-165341980.html

 

in other news, prostitution has now been heavily weighted by the govt in gdp contributing factors...............................

Mon, 04/29/2013 - 09:18 | 3509630 the not so migh...
the not so mighty maximiza's picture

they fuck for the republic

Mon, 04/29/2013 - 10:02 | 3509755 espirit
espirit's picture

Pay by the piece (ASE), or pay for the rest of your life?

Mon, 04/29/2013 - 09:32 | 3509645 Cursive
Cursive's picture

@kito

Voodoo pu-naan-ee = high grade intangibles

Mon, 04/29/2013 - 09:15 | 3509616 q99x2
q99x2's picture

A lot of people bought BitCoins.

Mon, 04/29/2013 - 09:24 | 3509644 j.tennquist
j.tennquist's picture

Yes, but do hookers accept Bitcoin?

 

Mon, 04/29/2013 - 09:25 | 3509622 Cognitive Dissonance
Cognitive Dissonance's picture

"Worse, when adjusting for inflation, real disposable income rose just 1.1% compared to last March, and just barely above the 0% breakeven."

One of the "benefits" of "official" lying about the "official" rate of inflation is that it enhances all the other "official" numbers.

#Winning

Mon, 04/29/2013 - 09:28 | 3509658 d edwards
d edwards's picture

Just wait until we get the new and improved GDP numbers in July-more bogus gov't lies.

Mon, 04/29/2013 - 09:20 | 3509627 Seasmoke
Seasmoke's picture

Public Employees are a service we do NOT need !

Mon, 04/29/2013 - 10:13 | 3509777 yogibear
yogibear's picture

Their guaranteed by the government to increase by 3%, They said so. They are adding more BS and cooking to increase the numbers and decrease the dbt to GDP ratio.

All's well so let's increase debt and blow all the money. The fed will print up Fed dollars to buy it.

 

 

Mon, 04/29/2013 - 09:20 | 3509637 ultraticum
ultraticum's picture

"The Fed can just step in and start buying goods and services . . . ".  I think they started with ammo.

Mon, 04/29/2013 - 09:35 | 3509696 Cognitive Dissonance
Cognitive Dissonance's picture

The plebs? Let them eat cake lead.

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