SPENDING STEADY, INCOME GROWTH WEAK …
Can we trust the government’s economic data? You know … when Washington, D.C. tells us how many jobs were created or how fast the economy grew?
Short answer: Probably not.
And yes … that’s truly disconcerting when you look at how bad the numbers have been lately.
Anyway, the latest snapshot of America’s economic health comes courtesy of the U.S. Bureau of Economic Analysis (BEA) – which released its latest income and spending data this week.
According to the numbers (.pdf), spending in June ticked up by 0.4 percent – beating analysts’ estimates of 0.3 percent. Unfortunately, incomes only grew by 0.2 percent – below the 0.3 percent projection.
Consumer spending has now outpaced income growth in each of the last three months – suggesting that Americans are racking up more debt to fuel their purchases.
Incomes are 2.7 percent higher than they were a year ago – the lowest year-to-year growth rate since December 2013. Meanwhile spending is up 3.7 percent from this time last year – the highest year-to-year gain since last May.
Meanwhile June’s personal savings rate was just 5.3 percent – its lowest reading since last March.
What should we make of these numbers?
It’s pretty simple (and potentially pretty scary): The weak economic growth experienced thus far in 2016 could soon be drawing to a close.
“We suspect the runway is running out,” the website Zero Hedge noted.