Moments ago the BEA reported the latest, November, data on Personal Income and Spending. For the second month in a row, Income, which rose a modest 0.2%, missed expectations of a 0.5% rise for the month, even as Personal Spending rose by 0.5% - driven by a 2.2% increase in spending on Durable Goods while Non-durable expenditures were unchanged on the month, in line with expectations. As a result, the US consumers dug even deeper into their meager savings, and in November the savings rate dropped once more, sliding from 4.5% to 4.2%, the lowest since January 2013, after hitting a high of 5.2% in September on "government shutdown uncertainty."
But perhaps most important, is that Real Disposable Income rose by just 0.1% in November, following a -0.2% drop the prior month. As a result, and as the chart below shows, the annual growth in Real Disposable Income has once again resumed its downward trajectory, and at the current pace of declines, it will likely turn negative as soon as next month.