Income And Spending: Meh

Posted 2012-11-30 09:03
by Karl Denninger
in Macro Factors

Personal income increased $0.4 billion, or less than 0.1 percent, and disposable personal income (DPI) increased $0.8 billion, or less than 0.1 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $20.2 billion, or 0.2 percent. In September, personal income increased $47.8 billion, or 0.4 percent, DPI increased $42.1 billion, or 0.4 percent, and PCE increased $84.0 billion, or 0.8 percent, based on revised estimates.

The release goes on to blame much (if not all) of this on Sandy.

The numbers say something entirely different.

As I noted last month we had re-established a pattern in July, August and September where spending was increasing faster than income. This cannot be continued, obviously, but you don't hear that among the unicorn-believing idiots.

Never mind that while Sandy undoubtedly deterred spending while the storm was in process it likely boosted it materially as soon as it was over, even if what got bought was chainsaws and other cleanup-related supplies. A dollar spent is a dollar spent.

These numbers are not good, but they have little or nothing to do with Sandy. Instead, what we're seeing is the inevitable result of trying to spend more than one makes -- exactly as our government is trying to evade responsibility for as well.

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