American Spending Grows Faster Than Income For The 29th Straight Month

For the 29th month in a row, Americans annual spending grew faster than their incomes as the 'no consequences' new normal rolls on, leaving the savings rate languishing near record lows - even if it did very modestly uptick in May.

Year-over-Year income growth reached 4.0% - the highest since Nov 2015; while YoY spending growth stalled at 4.4%.

Income growth was dominated by private workers seeing another uptick...

On the month, personal incomes grew 0.4% (as expected) - the fastest rate since Dec 2017.

However, for the second straight month, month-over-month spending growth disappointed - rising just 0.2% MoM vs +0.4% expectations.

But the growth in both continues.

The PCE Inflation data came in a little hotter than expected - rising at the fastest since March 2012...

As a reminder, the vast gap between extreme high confidence and extreme low savings rate - a borrow-my-way-to-happiness narrative - has never ended well in the past...

Remember, nothing lasts forever - ask the German soccer team.