February Personal Outlays Sustained By Service Spending Surge; Durable Goods Spending Slides
Moments ago the BEA reported February personal income and spending which were expected to show a modest pick up following what all economists have classified as the "polar vortex" winter doldrums. While it remains to be seen whether and if spending, and income, will indeed pick up considering the deplorable state of the US household's earnings prospects, both metrics came precisely in line with consensus estimates at 0.3% (if not those of DB's always amusing permabull Joe LaVorgna who expected a 0.6% increase in spending).
The personal savings rate picked up by the smallest possible margin, rising from 4.2% to 4.3% in February as a resuit of a downward revision in January spending (from 0.4% to 0.2%), amounting to $544.5 billion in February, compared with $535.9 billion in January.
The good news: US consumers can still be tapped for half a trillion in savings when it comes to bean counts of purchases.
Next, we highlight the danger of taking any data out of the government at face value. Recall that last month, the spending on services according to spending data, hit an all time record of over $70 billion:
Well, the is no longer the case, as the Jan service spending data has been revised well lower, to just $50 billion, however at the expense of a continuation in spending in February, when another $26 billion was forked over for "services" mostly of the healthcare kind:
As for spending on real, durable goods? It declined for the third month in a row, down by another $2.3 billion to $1250 billion, the lowest since March of 2013.
At least the US has Obamacare to keep spending afloat.
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