Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Personal income up 0.3% in November; spending up 0.3%
Supporting Image for Blog Post

 
Implications:  Consumers are buying again and doing it with vigor.  "Real" (inflation-adjusted) consumer spending increased 0.3% in November and is up at a 3.3% annual rate in the past six months.  This is not an unsustainable or temporary buying binge.  Real wages and salaries in the private sector are up at a 2.8% annual rate in the past six months; real profits for small businesses are up at a 4.7% rate.  In addition, those touting a "new normal" where the real economy grows 2% or less per year are making a fundamental mistake about deleveraging.  Consumer deleveraging may impede spending when the debt reduction begins; deleveraging may also impede spending when the debt reductions accelerate.  But deleveraging does not hurt spending when the debt reductions slow down.  If a consumer is still paying down debt but is doing so more slowly than last year, her spending increases faster than her income, not slower.  On the inflation front, consumption prices are up only 1% versus a year ago but seem to be modestly accelerating, with prices up at a 1.3% annual rate in the past three months.  The opposite is true if we exclude food and energy.  "Core" prices are up 0.8% versus a year ago but up at only a 0.3% annual rate in the past three months.  Low core inflation is the excuse the Federal Reserve is using for quantitative easing.  In other news this morning, new claims for unemployment insurance declined 3,000 last week to 420,000.  Continuing claims for regular state benefits fell 103,000 to 4.06 million.  These figures suggest robust growth in private sector payrolls in December.

Click here to view the entire report.
Posted on Thursday, December 23, 2010 @ 10:25 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Brian discusses the housing market on CNBC's "Kudlow Report"
Existing home sales increased 5.6% in November to an annual rate of 4.68 million
Q3 GDP revised up to 2.6% annual rate
Brian debates the debt market on CNBC's Kudlow Report
Greedy Innkeeper or Generous Capitalist?
Elections Have Consequences - II
Housing starts rose 3.9% in October to 555,000 units at an annual rate
Brian discusses the reasons to be optimistic about 2011 on FBN
Industrial Production Increased 0.4% in November
Brian debates the growth outlook and the bond market on CNBC's Kudlow Report
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.