Personal Income, Spending Come In Weaker Ahead Of Gasoline Price Shock

Tyler Durden's picture

And some more bad news for the economy, as the driver of 70% of US GDP, the US consumer, continues to retrench. Today's personal spending and income data showed several things: that in January Personal Incomes did not keep pace with the rate of growth, rising 0.3% compared to 0.5% in December, and less than the 0.5% expected. Spending also missed expectations of a 0.4% rise, instead picking up just 0.2%, from 0.0% in December. More importantly, we once again see that living in a socialist state has its drawbacks when the spigot is shut off: among the biggest drivers for the weak data was a change in government handouts: "Personal current transfer receipts decreased $3.6 billion in January, in contrast to an increase of $13.8 billion in December.  Within personal current transfer receipts, “other” government social benefits to persons decreased $14.9 billion in January, in contrast to an increase of $1.5 billion in December.  The January change in “other” government social benefits to persons reflected a decrease of $13.6 billion due to the expiration of the Making Work Pay refundable tax credits." Luckily what the government takes with one hand it offsets with the other: "Government social benefits for Medicaid decreased $7.8 billion in January, in contrast to an increase of $0.2 billion in December.  Government social benefits for social security increased $20.3 billion in January, compared to an increase of $9.6 billion in December. The January change reflected 3.6-percent cost-of-living adjustments (COLAs) to social security benefits and to several other federal transfer payment programs.  Together, these COLAs added $30.2 billion to the January increase in government social benefits to persons."  Well at least somebody still does COLA in this day and age of ubiquitous 'deflation.'

Somre more commentary from Bloomberg, which is getting increasingly dour on the US consumer:

  • Personal spending up 0.2% vs est. 0.4% (range 0.2%-0.6%)
  • Core inflation probably rose 0.2% M/m, matching est.; rose 1.9% Y/y vs est. 1.8%
  • "Troubling’’ that spending data calculated prior to gasoline price spike, “doesn’t bode well” for current qtr growth, says Bloomberg economist Joseph Brusuelas
  • Real disposable personal incomes down 0.1%, up “lowly” 0.6% Y/y, implying “extremely weak spending in the near term,” says Bloomberg economist Rich Yamarone

As for our favorite savings rate chart, alas since all the data has been revised, we will need to adjusted our methodology to match all the behind the scenes fudging that continues to go on at all the BLS linked departments.

Comment viewing options

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

And consumer confidence came in how far above expectation?

SheepDog-One's picture

The 'consumer' is now mainlining Zoloft and Ambien....its GOOD TIMES! Hell who cares what the avg sheeple out there thinks, theyre whacked out of their minds on 'anti depressants' all over the place. Load em up with Ambien, then lets poll em, see how theyre feelin....LOL.


BLOTTO's picture

And those not taking anti depressants - are getting dumbed and numbed down by other substances in our water, food, tv, etc...

So we are all getting a 'hit' of something.


Moneyswirth's picture


When not duped up on meds, we need to watch American Idle, Jersey Whore, etc. etc. to marvel at other people's misery, else we need to cry at our own.

This is what the decline of empire feels like--a bankrupt nation, financially and socially.  The Turks are sailing up the Bosporus, the barbarian hordes on the horizon....

SheepDog-One's picture

Theyre going to TELL you youre happy....and if you dont like it, youre probably a TERRORIST!

boiltherich's picture

Consumer confidence is a lagging indicator in that it reflects how people felt about the economy (prices and employment to them) and are happy and confident when employment is going up (or at least not getting worse) and prices are falling (or at least not going up).  If they pay $3 a gallon for gas in November and December they will report feeling good when asked in December and January and reported in January and February.

They are also considered a leading indicator in that a happy consumer tends to go out and spend more in the future, and bet on the future by indulging in credit purchases (larger items) and forming households, that is planning families, buying houses, and such long-term commitments.

What we see now is the feel good hangover of low gasoline prices which we have seen now jump by 80 cents in just a few weeks time, and the rise has been so large an so fast that it is shocking and not yet factored into the old data just now getting reported.  April and May (and probably June, July, August, etc) numbers will tank sharply as the realization sets in that we are back to full stagflation collapse as usual. 

Ahwooga's picture

My question is, if you take the actual numbers and not the BLS bullshit ones, with unemployment, housing, food, energy and gasoline prices where they are, who are they polling? Is there anywhere that we can view the sample population?

SheepDog-One's picture

I have no idea who theyre polling, sure isnt me!

krispkritter's picture

Bureau of Lies and Subterfuge strikes again...

kridkrid's picture

Who are they polling... with any poll?  Someone wrote something yesterday about the Republican primaries... something to the effect of "sure... Ron Paul is pulling 10% of the vote, even though he has 4,000 people show up to his campaign stops, vs. about 400 for MR or RS.  I "virtually" nodded in agreement.  "Of course the election if fixed, and diebold runs the election".  But then I started to think about polling data.  The polliing data heading into MI and Arizona supported the outcome pretty closely.  So if the vote is a fraud, so are all of the polling companies, which to me, seemed quite a bit less likely.  I mean they are fraudulent to a point... clearly they drive opinion at least as much as they measure it... that I get... but for the vote count to be an outright lie, the polling data would need to be as well. Anyway... my random stream of consciousness.

Shizzmoney's picture

Hicks: I'm sick of the polls, they are NOT funny, hate em'.  Where do they get these people, the S&M parlor?"

Gully Foyle's picture

Can anyone tell me if this is damage control or was the Lord really, really dumb?

If it is damage control someone is getting worried.

Tory Lord tells peers about a weird Internet scam at great length

On February 16th, Lord David James of Blackheath (a Conservative life peer) spoke for 11 minutes in the UK House of Lords about a supposed $15 trillion federal reserve conspiracy that involved more gold than has ever been mined. It turned out he had fallen for a widespread scam.

March 1, 2012 British Lord fell for $15 trillion federal reserve scam

But Lord James, keeping calm and carrying on, justified the story by pointing to a first-of-its-kind audit of the Federal Reserve system, published in July 2011 by the Government Accountability Office and publicized by the self-described democratic socialist Bernie Sanders, a senator from Vermont.

Sanders claimed at the time that the audit showed “that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world.”

The GAO report itself, on page 144, does describe $16.1 trillion in loans issued by the Fed from December 1, 2007 through July 21,2010. And adding the Fed’s “broad-based emergency program” loans, the report documents about $26 trillion of borrowing over a 31-month period.

For a nation worried over its $15.4 trillion national debt, the idea of a cash reserve that big would be reassuring — if the money were all in one place at the same time. But the Fed’s money ebbs and flows in and out with surprising speed, making the $26 trillion figure a deceptive one. Confusing that total with the Fed’s net worth would be like confusing a taxpayer’s annual salary with the value of his checking account.

Yet conspiracy theorists from Bernie Sanders to former Democratic Florida Rep. Alan Grayson — and even the Occupy Wall Street movement — have pointed to last year’s GAO report as evidence of a global conspiracy of Ron Paulian proportions.

tmosley's picture

Eh?  He said it was clearly some sort of scam in his speach.  Not only that, but he had documents with the signatures of Greenspan and Geithner on them.  Why would those guys sign off on something related to an internet scam?

Further, this guy isn't some novice.  He is an experience financial professional.  Worked for Lloyd's as I recall.

Ahwooga's picture

That's what I mean. People have less money to buy stuff that is more expensive than ever and they are "confident"??? Give me a break! Ta for the numbers.

Jlmadyson's picture

Go read the piece from the AP on this posted on yahoo finance. There is a sentence in that piece in which I have never witnessed so much spin in my life.

Just absurd.

Moneyswirth's picture

Maybe Obamao needs to kill Osama Bin Laden again. 

taniquetil's picture

Plus he could claim that he has invented a way to save people from dying.


Just like old Anakin Skywalker

SheepDog-One's picture

'Consumer entrenching"? Why, just because they have no money? AW spoiled brats COME ON be optimistic! Anal rapings usually ALWAYS end....theres hope!

SheepDog-One's picture

Lets see....we wont include food and gas in 'inflation data', but we well wring our hands over it when we're looking at what the consumer monkeys are spending....'doesnt bode well'....awe come on little campers! Just CHARGE it!

azzhatter's picture

Since I went Galt my spending is down 90% and I'm looking to cut further

SheepDog-One's picture

Hell with these clowns, I dont spend anything now except bare needs, and those I always wait until theyre marked way down on clearance...cut driving way down too...amazing what you dont need really, and Im not going to 'behave' as they want and run around spending on their garbage and taking my directed 2 week driving vacation they can kiss my ass Im staying home oiling a rifle.

Jim in MN's picture

But, but, but......the premium Friskies 'filet mignon and champagne' cat food is calling!!!!

Hippocratic Oaf's picture

+1 sheepie. 1st laugh of the day. May be the only.

Shizzmoney's picture

More importantly, we once again see that living in a socialist state has its drawbacks when the spigot is shut off


I just had to go to the ER recently here in MA.  The bill I got? $1400.  And *I* have insurance through my employer.

If I actually lived in a *socialist* state, I could of kept that money in my pocket and spent it on the shit that keeps *your* stock market alfoat.

Thats the problem with society today; the ideology mindfuck the banker-led education system has put into our brains, as well as our parents, confuses the population to go at each other's throats for reason that they don't even understand.  The crony capitalist system we have lived in the last 20 years is actually fascism, while the "fascist" states that existed in the 1930s were actually Nationalist states, including Russia and for today, China.  That's why China is going to fall, because Nationalist states often fall victims to hubris. 

But let's defend the corporate fascist state by misidentifying it.  Let's go back to the Neo Feudalist days where 60, 70% of my income is taxed through the state or inflation, while my benefits from labor are stripped from me because "I'm getting too many handouts".

I mean, this all isn't news.  The corporate state is bleeding us dry, and throwing us crumbs that people call "socialist handouts", where the crumbs are neither socialist, or a handout.  The misidenitifcation of the enemy, the lust for fiat currency, in exchange for wealth distribution, is the reason why we are in the conundrum we are in today.  It's not the money's fault; it's the people behind it.  even though the people behind it are the same people as the people behind it.

All economies are planned. There are no examples of a pure laissez-fair economy as far as I know.  Austrian, Keyesian, whatever.  Its all planned by those at the top to finger fuck (with lube for those who are lucky) our wealth, especially the lower and middle classes.  Then the politicans and their corporate masters blame those same classes, especially the younger people, for societys ills instead of, you know, maybe looking in the fuckin mirror. 

But consumer confidence is up, so go out and buy that TV or more McShit.  Watch that new TV and listen to some overeducated moron who works for a think tank forms your ideology, instead of, you know, maybe spending the time to read and develop your own thinking of the world.

There are two things missing in todays human society: accountability and critical thinking. 

The only way out, is extermination.

It will rue us all.


SheepDog-One's picture

Yep, in a 'socialist state' my stitches wouldnt have cost me $650, with insurance, it would have been free. What we're in is something way worse than 'socialism' for sure.

rsnoble's picture

For-profit medicine is the worse.  Send you home with a $250,000 hang nail and then some asshole sends you a $10k bottle of O2.  Anything related to medical is big$ and the bullshit needs to stop. Instead of reinventing the system hospitals are just closing down.  You can't have half the country in a depressioin and have the other half attempt to operate like there's nothing wrong..................much like public union. I have so many different tax bills from these pos parasites I don't even know what's what anymore. Austerity motherfuckers!

Oh and btw something like 70% of medical bankruptcies in the US are people the HAVE insurance.  If you have a 80/20 plan, like most do, that 20% can rack up fast.  This is all a result of the grand global gobble scheme, it ruined many of us and left a few standing that refuse to join us and will destroy us to keep what they have. Thanks. Appreciate that.

Silver Dreamer's picture

Even on a 90% plan, my wife's surgeries and medical bills over only three years nearly ruined us financially.  We got foreclosed on in the end, but it was either the house or going broke entirely.  I'm still digging out from underneath those bills.  I'm not complaining though.  If it were not for the insurance, my situation would have been far far worse!

VelvetHog's picture

Not free!  Someone somewhere would still have to pay.  Unless you are a Federal Reserve Primary Dealer there is no "free".

VelvetHog's picture

"There are two things missing in todays human society: accountability and critical thinking."

Can I get an "Amen, Brother!"?

rsnoble's picture

Here's the finance pages version of the story:


Notice the positive twist and green futures?

Joe Davola's picture

Am I un-American if I spend, or if I save?


Cue Vinny Barbarino:  I'm so confused.

Rainman's picture

Taxpayers are in for a surprise due to the expiration of the MWP tax credit in 2011. That will add $400/ single or $800 /couple to the tax due. The gas price hike and this overlooked item pretty much wipes out Obama's payroll tax cut extension.

rsnoble's picture

No it doesn't because it won't be mentioned. The tax cut is the only newsworthy item.  Ron Paul is right: People are fed up with the lies.

semperfi's picture

Govt tranfer payments must rise to meet our basic needs.  Born into the USA, I am entitiled to a basic living.  Gasoline is required to get to work and back.  Therefore the Govt must either cap/control its price and/or just take over the supply chain.  Same with basic housing. As an American, I am entitled to basic housing - nothing fancy - just a basic roof over my head.  And food, again just the basics, and the Michelle Obama diet is fine with me. Health care too, nothing fancy - just what our public servants in D.C. get. And since car insurance is required, the Govt must provide it just like they provide us the IRS to assist us with our required tax payments.  And lastly, a job - a Govt job with Govt bennies and Govt pension - preferrably a union Govt job.  And Warren Buffet can subsidize it all, and JPM, and GSax, all those rich Hollywood types, and the rich super athletes, and all those nice liberals who care about us all so much who I'm sure would be willing to make sure I'm well taken care of.  And if all those contributions still aren't enough I'm sure Bennie & Da Boyz at Da Fed can just insert a few zeros on the right side of our checking account balances with a couple of keystrokes and mouse clicks, or finger swipes and taps on their iPads.  Problem solved.

Caviar Emptor's picture

Quick review:

Your costs?.... UP!

Your earnings and net worth (Case Schiller)? .... DOWN! 


There, That was easy!

boiltherich's picture

The Tylers: 

Personal Income, Spending Come In Weaker Ahead Of Gasoline Price Shock


New Jobless Claims Steady; Income, Prices, Spending Up


The MSM does not even bother with reality anymore, they just feed the sheeple what they need them to hear... spend spend spend because happy days are here again. 

Vince Clortho's picture

Do All your shopping at TBTFr - Us


Everything you need from Homes to Cars to Gadgets and so much more.


Sign up for the popular "Debt Slave Fo LIfe" Credit Plan.

Use your children and Grand-children as collateral!


Jim in MN's picture



Q;  Who's to blame for high gasoline prices?

A:  Evil speculators

Q:  Like....who?

A:  JP Morgan, Goldman Sachs

Q: Who did you select to run your economic team?

A: JP Morgan, Goldman Sachs

Q: So, your top economic advisors are responsible for high gas prices?

A: Guards!  Sieze these reporters and ship them to Syria for bombardment!

lakecity55's picture

All Regimes near collapse pump out vast amounts of fraudulent "statistics" and turn on their own citizens as a last gasp before they fail.

The NAZI-fication of American " homeland security" and Baghdad Bob government  statements means only 1 thing:

Load up on PMs, Food, and Lead. Lots of Lead. Teach your dog and cat to shoot.

Snakeeyes's picture

The Godfather 3 economy: Just when I thought I was out... they pull me back in.

Personal Income Remains Anemic, Spending Flat, ISM Declines - Wait for Higher Gas Price Rises to Kick In!

dirtbagger's picture

The average American consumer doesn't know squat about economics, but they all understand the cost of gasoline at the pump.  When gas prices spike, the consumer pulls back, end-of story.  The same exact thing happened in April 2011.   Until we have a Congress and President that will put an end to excessive commodity speculation this is going to keep happening over and over.  To allow speculative traders to control the price of one our most strategic commodities is utter madness, if not criminal.    If real unmanipulated markets existed, Demand/Supply and production costs indicate that oil should be trading somewhere between $60 and $80.