Consumer spending, which accounts for roughly 70% of GDP, is critical to the Fed’s optimistic view on the economy as it prepares to hike rates in December. However, consumer spending slowed in the third quarter, and this week’s Fed statement downgraded consumer spending, saying it is “rising moderately," and no longer “growing strongly."
Indeed, there are reasons for concern. This is evident from the nearby chart, which displays year-over-year growth in payroll jobs (top line) and real personal income (bottom line).
Growth in nonfarm payroll jobs has been easing since early 2015 and declined to a 32-month low, with key sections of the population faring worse than others. Meanwhile, growth in real personal income has slipped to a 33-month low. With job and personal income growth in downtrends, consumers’ ability to boost spending is clearly under question.
>>>>> Scroll down to view and make comments <<<<<<
Econintersect wants your comments,
data and opinion on the articles posted. As the internet is a
"war zone" of trolls, hackers and spammers - Econintersect must balance its
defences against ease of commenting. We have joined with Livefyre
to manage our comment streams.
To comment, using Livefyre just click the "Sign In" button at the top-left corner of
the comment box below. You can create a commenting account using your
favorite social network such as Twitter, Facebook, Google+, LinkedIn or
Open ID - or open a Livefyre account using your email address.
You can also comment using Facebook directly using he comment block below.
Print this page or create a PDF file of this page
The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.
Take a look at what is going on inside of Econintersect.com