Savings Rate

January Spending Surge "Revised" Away, Pushing Savings Rate To Highest Since 2012; Personal Income Slides

Headline data for income modestly beat expectations (+0.2% MoM vs +0.1% MoM) and spending met expectations at +0.1% MoM respectively. Income growth YoY slowed to 4.0% however - near its weakest since Nov 2013. Spending growth also slowed to +3.8% YoY (from 2.9% in Jan) but the big story is the major downward revisions in spending. January's +0.5% 'surge' in spending was revised to a mere +0.1% trickle - the weakest in over a year.

Why Bond Traders Have No Idea What's Going On

"...markets have essentially lost confidence in the ability for central banks to stoke growth and inflation... we see very few reasons to be excited by today’s action or any development since the February 11th market lows."

Fear The Smell Of (Monetary) Napalm In The Morning

If central bankers think that "helicopter money" might be an option to combat deflationary pressures and sluggish economies, the right time to launch the choppers is before consumers realize they need them. As history shows, after that, it is too late.

Rate Hike Odds Rise As January Income, Spending Surge Most Since May

Amid the collapse of PMIs, regional Fed surveys, and surging inventories, personal income and spending both surged 0.5% MoM in January  - both better than expected. This is the best monthly gain since May 2015 as a drastically-revised data series notches the savings rate lower historically, but rose MoM. It seems Mester's comments this morning that a March hike is still on the table just got further support... time for another market crash to nsure that doesn't happen.

Even The Average Joe Gets It: "They’re Winding Us All Up For A Minsky Moment"

"... the average Joe isn’t as gullible as he once was and the personal savings rate remains high and is rising. Get out and buy something you don’t need, your kids can pay for their own education. If you really want to see people spend and invest there has to be some belief this won’t all end in tears."

Savings Rate Surges To Highest Since 2012 As Spending Disappoints

The Keynesians will not be pleased. Despite the holiday season, December spending disappointed with no change MoM (0.0% vs +0.1% exp). This is further sentiment-destructivbe as income data rose more than expected MoM (+0.3% vs +0.2% exp) even as income growth YoY slipped to its weakest in 9 months. This of course means the personal savings rate rose, pushing to 5.5% - the highest since 2012.

The BoJ "Gift" Is A One Day Reprieve - Use It Wisely

By surprising markets with a move to a negative deposit rate, the Bank of Japan gave investors temporary reprieve, providing a much needed opportunity to pare portfolio risk at better prices. Unfortunately, the improvement in financial asset prices will be short-lived; except, of course, for long-maturity Treasuries.

Why The 10Y Yield Will Slide To 1.75%: Deutsche Bank Explains

"Before investors sell 10s, they need the Fed to pause...  The curve flattens into March 2s10s with risk off market dynamics and an increasing probability of relent, followed by bear steepening after a Fed pause. Rates could then stabilize or decline, depending on whether recession is avoided or at least postponed."

Personal Income, Spending Increase By 0.3% In November As Savings Rate Dips To 5.5%

The end result was that in November personal savings was $748 billion, a $9.4 billion decline from the $757 billion a month ago, which translates into a 5.5% savings rate, down from last month's 5.6%, however well above the average rate seen over the past 12 months as consumers continue to be unwilling to dip into their savings despite the so-called "gas" tax cut.

Global Stocks Rise; US Traders Gives Thanks For Higher Equity Futures

While US floor markets are closed for the Thanksgiving holiday (equity, rates and energy futures are open until 1pm Eastern), Europe and Asia (as well as US equity futures) were busy rebounding overnight on strength in the commodity complex following yesterday's news that China's metals producers have asked for a wholesale government bailout or the "QEmmodity" as we have dubbed it, for the first time since 2009, which together with news that China would soon start arresting "malicious metal sellers" has provided a push for commodity prices across the board.

US Consumers Hunker Down: Personal Spending Misses; Savings Rate Soars To Highest Since 2012

If this data is accurate, and keep in mind the BEA has a habit of revising spending higher after it revises income, to "boost" GDP as we revealed last year, this means that the US consumer is hunkering down at an unprecedented pace, and the 5.6% savings rate is now the highest since 2012, suggesting not only are US consumer unwilling to spending much money, but are actively worried about what is coming just around the corner.

The Relevance Of Gold - Sprott's 3 Litmus Tests

The investment thesis for gold has never been limited to popular relationships, such as CPI-type inflation, financial meltdown or political instability. We prefer to focus on the irretrievable gap between financial assets (claims on future output) and productive output (GDP). In essence, the most compelling reason to own gold is that financial assets have lost their underpinnings to sustainable productive output.