Fresh from the BEA Website:
Personal income increased $59.3 billion, or 0.5 percent, and disposable personal income (DPI)increased $52.0 billion, or 0.5 percent, in August, according to the Bureau of Economic Analysis.Personal consumption expenditures (PCE) increased $41.3 billion, or 0.4 percent. In July,personal income increased $22.0 billion, or 0.2 percent, DPI increased $5.7 billion, or less than 0.1 percent, and PCE increased $41.4 billion, or 0.4 percent, based on revised estimates.
Real disposable income increased 0.2 percent in August, in contrast to a decrease of 0.2percent in July. Real PCE increased 0.2 percent, the same increase as in July.
Although these figures came in slightly higher (or in line with) analyst expectations of around 0.4% and 0.3% for income and expenditures, the growth rate is still very tepid.
Calculated Risk, an economics blog, points out that the data shows expenditure growth in Q3 will probably be around 2.0% - barring a significant change in September, and that this suggests sluggish GDP growth in Q3.
It’s worth noting that consumer spending drives anywhere from two-thirds to three-fourths of US economic output as measured by GDP. A 1.5% to 2.0% rate of growth in real (after inflation) GDP is insufficient to produce enough jobs to keep pace with population growth.
So yes, Ms. Velma Hart. This is the new reality. At least for a while.