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Blame It On The Weather? Personal Spending On Services Highest Ever In January

Tyler Durden's picture




 

Moments ago the BEA released the January personal income and spending data, which surprised to the upside on both sides: Personal Income rose 0.3% in January, on expectations of a 0.2% increase, while spending roared up by 0.4% well above the 0.1% expected. Great news right? Well, not exactly.

First the December spending data was revised from 0.4% to 0.1%, just as expected, following the big miss in last week's Q4 GDP revision. Second, of the $43.9 bilion increase in Peronal Income, some $29.8 billion, or over two thirds, was thanks to personal current transfer receipts, i.e., the government. But it was the personal spending breakdown that was truly surprising. One would think that based on a "bullish" take of the data, consumers opened up their wallets and purchased durable goods, such as TVs, gizmos, and what not, boost retailers top and bottom lines? Alas, that is not the case. The chart below shows the monthly increase in spending on durable and non-durable goods. Both declined.

 

So what happened in January to account for this spending spree? The chart below of spending on Services should explain it. Not the outlier spending in January, when "harsh weather" was said to have ground spending to a halt.

 

And there you have it: all services, in fact, in January US consumers spent a record amount of $72 billion on services. So, the Service Recovery, if not so much Goods. It appears the weather was so harsh and horrible it led to... the largest spending on services in history! Of course, nobody will mention this as it is a favorable benefit from the weather: remember the propaganda only identifies the negative data and scapegoats it with snow in the winter.

As for where US consumer got the funding, simple: personal savings declined once again, down to $540.1 billion from $544.5 billion, the fourth consecutive monthly drop, even if the savings rate of 4.3%, the lowest since March 2013, was more or less unchanged from the prior month.

 

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Mon, 03/03/2014 - 10:07 | 4501098 Seasmoke
Seasmoke's picture

There goes more of the seed corn...I hope we make it to Summer

Mon, 03/03/2014 - 10:16 | 4501127 Hippocratic Oaf
Hippocratic Oaf's picture

Yep, here come the bloated bullshit stats to counter this crush we're about to see in the mkts.

Mon, 03/03/2014 - 10:19 | 4501140 kliguy38
kliguy38's picture

Captain of Titanic..."could we have the band play Happy Day's are here Again"........it will give the passengers some cheer when they find out the lifeboats are a little short

Mon, 03/03/2014 - 10:38 | 4501216 Rubbish
Rubbish's picture

Look at the bright side, I'm in service with a smile, not really I pick up trash in commercial parking lots and was able to purchase 3 shinny buffalos last month.

 

Good money in trash Bitchez....

Mon, 03/03/2014 - 10:42 | 4501241 NoDebt
NoDebt's picture

It's honest work in my book.  

Mon, 03/03/2014 - 10:57 | 4501305 Dr. Kenneth Noi...
Mon, 03/03/2014 - 10:09 | 4501099 Max Damage
Max Damage's picture

And the usual revise the previous month down fakery caused this beat

Freeze the fuckers assets who do these numbers for corruption!!!!

Get the EU to discuss it and they'll stop it right away ;)

Mon, 03/03/2014 - 10:10 | 4501104 madbraz
madbraz's picture

The wonder of the Goal Seek function.

Mon, 03/03/2014 - 10:10 | 4501105 playnstocks
playnstocks's picture

BTFD!

Mon, 03/03/2014 - 10:12 | 4501116 Law97
Law97's picture

I just hope it stays red at the open long enough to even BTFD. 

Mon, 03/03/2014 - 10:12 | 4501109 AdvancingTime
AdvancingTime's picture

Are payments on insurance including rate hikes and Obamacare dumped into services?

Mon, 03/03/2014 - 10:31 | 4501191 Rainman
Rainman's picture

COLA increase of 1.5% for SS recipients hits in January too ..... methinx increasing gubmint transfer payments were a big impact across the board.

Mon, 03/03/2014 - 10:13 | 4501111 ArkansasAngie
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Services?  Were people hiring people to press their pants?

 

Snow removal?

 

I know ... water dowsing.

Mon, 03/03/2014 - 10:30 | 4501180 ArkansasAngie
ArkansasAngie's picture

I know ... I know ... Bank services charges on people writting bad checks they had to cover by dipping into savings for.

Mon, 03/03/2014 - 10:13 | 4501117 Kaiser Sousa
Kaiser Sousa's picture

if you think that London aint the center of the war on the phony paper price of Silver you got to be trippin...

http://www.kitco.com/charts/livesilver.html

 

Mon, 03/03/2014 - 10:13 | 4501119 B2u
B2u's picture

Spending on hookers in Nevada?  Services...right?

Mon, 03/03/2014 - 10:16 | 4501128 buzzsaw99
buzzsaw99's picture

hookers and blow yes, nevada, probably more like manhattan

Mon, 03/03/2014 - 10:15 | 4501125 buzzsaw99
buzzsaw99's picture

bullish

Mon, 03/03/2014 - 10:15 | 4501126 Dr. Engali
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Savings? Who needs savings when the dollar is becoming worth less?

Mon, 03/03/2014 - 10:25 | 4501160 Oldwood
Oldwood's picture

We must kill savings as bankers would be forced to pay us a return. Besides, we are a debt based economy, where all debt is based on fictional money to be repaid with interest to the banks. And with no savings to fall back on, every recession creates ever more dependents to vote in our tyrants.

Mon, 03/03/2014 - 10:18 | 4501134 NoIdea
NoIdea's picture

Jellen says BTFD. This is the last dip before SPY 2000 by May

Mon, 03/03/2014 - 10:22 | 4501138 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Dont mind those mushroom clouds  just get ready to BTFD

Mon, 03/03/2014 - 10:28 | 4501177 El Hosel
El Hosel's picture

Don't buy anything until Gartman goes bearish of it.

Mon, 03/03/2014 - 10:26 | 4501168 NOZZLE
NOZZLE's picture

Services,  tow trucks, car repair,  snow plowing,  feel the recovery

Mon, 03/03/2014 - 10:30 | 4501189 Judge Crater
Judge Crater's picture

Those services number will be revised downward in two months, with some sort of excuse that doesn't mention the word "fraud."

Mon, 03/03/2014 - 10:38 | 4501214 adr
adr's picture

Is delivering heating oil a service?

Doesn't really matter these numbers haven't been based on anything real in years.

Mon, 03/03/2014 - 10:54 | 4501294 optimator
optimator's picture

Spending on those Forever stamps must have gone way up before the price increase.  Great investment long or short term as it reflects real inflation.

Mon, 03/03/2014 - 12:39 | 4501908 kchrisc
kchrisc's picture

Do people still waste their time on these "Winston Smith" stats?

I quit paying attention to them after someone on ZH ran through all the mods and mods to the mods details in the BLS' employment numbers.

"Is it rat or chicken?"

Do NOT follow this link or you will be banned from the site!