Savings Rate

Consumer Confidence Is The Highest In 13 Years

The final UMichigan consumer confidence print is in, and it was even higher, printing at 98.5, up from 98.2 in December, and above the 98.1 consensus estimate. This was the highest print since January 2014, or as the survey emphatically notes, "consumers expressed a higher level of confidence January than any other time in the last dozen years."

Just 3 Things

Importantly, with economic growth anemic, consumers stretched and an economy heading into one of the longest post-recessionary expansions on record, there is little room for a policy misstep at this juncture. Maybe Trump will be wildly successful and the economy will come roaring back. That is a possibility. But there is also the risk it won’t. Optimism is one thing. Your personal capital and financial health is quite another.

3 Things: Policy Hopes, Consumer-Spending Puppies, & Tax-Cut Rainbows

"Will “Trumponomics” change the course of the U.S. economy? We certainly hope so as any improvement that filters down to the bottom 80% of the country will be beneficial. However, as investors, we must understand the difference between a “narrative-driven” advance and one driven by strengthening fundamentals. The first is short-term and leads to bad outcomes. The other isn’t, and doesn’t. "

Why Trump's 4% GDP Will Remain Elusive

For the umpteenth year in a row, mainstream economists and analysts are once again planting the seeds of hope for a return to stronger GDP growth. The White House has hoped for it for the last 8 years, and now President-elect Trump is all but promising a surge in economic growth. Unfortunately, while promises are great, we must analyze the reality of attaining such a lofty resurgence.

Disposable Income Per Capita Grows At Weakest Rate Since 2014

For the 3rd month in a row, annual US spending growth has outpaced annual income growth (+4.2% spending vs +3.5% income). However, both spending and income growth MoM disappointed (with incomes unchanged MoM - the weakest since Feb 2016). Combine these two and the savings rate in November plunged to its lowest since March 2015.

Can Trumponomics Fix What's Broken?

Will “Trumponomics” change the course of the U.S. economy? We certainly hope so. It will be better for us all. However, as investors, we must understand the difference between a “narrative-driven” advance and one driven by strengthening fundamentals. The first is short-term and leads to bad outcomes. The other isn’t, and doesn’t.

US Savings Rate Surged Pre-Election As Spending Slowed, Weakens Q3 GDP

After an upwardly revised September surge, US personal spending growth slowed to just 0.3% in October and with incomes rising more than expected (+0.6% vs +0.4% exp), it appears Americans were careful heading into the election as the savings rate surged from 5.7% to 6.0%. However, the weaker than expected growth in spending will likely knock Q3 GDP revisions lower.

Tempering US Economic Growth Expectations

Much of the recent optimism seems to stem from a the belief that the new administration will be able to dramatically (and immediately) increase economic growth. The problem is that the US and global economy continue to face major structural issues that seem to be beyond the control of any politician. Increasingly, it is feeling like we are in a “buy the rumor, sell the news” kind of market.

Cass Freight Index Takes Another Dive Killing August's "False Hope"

It’s difficult to make a case for a great holiday sales season or robust third quarter GDP based on the Cass Freight Index which shows shipments sank 0.4% for the month and are down 3.1% from shipments a year ago. As Cass warns, the "glimmer of ‘less bad’ hope in August" was "false hope."

US Spending Disappoints In August As Savings Rate Rises For Second Month

After pesonal spending growth slowed modestly one month ago, rising 3.8% Y/Y, in August US consumption once again disappointed, staying flat in the month, below the 0.1% expected sequential rebound, although this was offset by an upward revision to the last month's data from 0.3% to 0.4%. On an inflation adjusted basis, as feeds into the GDP beancount, Real PCE dipped -0.1% in August, well below July's 0.3% bounce, missing the expectation of a 0.1% rise while the Core PCE Index was inline with the 1.7% expected on a Y/Y basis.