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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Seasmoke's picture

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

Hippocratic Oaf's picture

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

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

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....

NoDebt's picture

It's honest work in my book.  

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 ;)

madbraz's picture

The wonder of the Goal Seek function.

Law97's picture

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

AdvancingTime's picture

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

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.

ArkansasAngie's picture

Services?  Were people hiring people to press their pants?

 

Snow removal?

 

I know ... water dowsing.

ArkansasAngie's picture

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

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

 

B2u's picture

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

buzzsaw99's picture

hookers and blow yes, nevada, probably more like manhattan

Dr. Engali's picture

Savings? Who needs savings when the dollar is becoming worth less?

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.

NoIdea's picture

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

The_Ungrateful_Yid's picture

Dont mind those mushroom clouds  just get ready to BTFD

El Hosel's picture

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

NOZZLE's picture

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

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."

adr's picture

Is delivering heating oil a service?

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

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.

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?"