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Spending and price indexes from the BEA, annotations and highlights by MIsh.

Personal Income and Outlays

The BEA’s Personal Income and Outlays report for December shows consumers went on an unsustainable spending spree.

• Personal income increased $60.0 billion (0.3 percent at a monthly rate) in December
• Disposable personal income (DPI), personal income less personal current taxes, increased $51.8 billion (0.3 percent)
• Personal consumption expenditures (PCE) increased $133.9 billion (0.7 percent).
• The PCE price index increased 0.2 percent.
• Excluding food and energy, the PCE price index increased 0.2 percent.
• Real (inflation-adjusted) DPI increased 0.1 percent in December
• Real (inflation-adjusted) PCE increased 0.5 percent; goods increased 1.1 percent and services increased 0.3 percent.

The St. Louis Fed has not updated its data repository yet, and there is also scheduled maintenance today. I will post more charts as data downloads become available.

4th Quarter GDP Up a Strong 3.3 Percent

Strong spending fueled fourth-quarter GDP.

For discussion, please see 4th Quarter GDP Blows Past Consensus, Up a Strong 3.3 Percent

Debt Soaring Out of Sight

GDP is fueled by both consumer debt and government debt. Regarding government debt, Republicans are in on the deal.

For example, The GOP Supports a Child Tax Credit Boost and Affordable Housing Expansion

Without passing anything but continuing resolutions, we went from a House Speake Kevin McCarthy’s proposal of $1.471 trillion bill to Mike Johnson’s $1.66 trillion bill that does not include, Ukraine, Israel, or the US border with Mexico.

Fueled by Debt

Total consumer credit, revolving credit, and credit card interest rates all hit new record highs in November.

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Consumer credit data from the Fed, chart by Mish

Consumer Credit Hits Record $5 Trillion

For discussion, please see Retail Sales Surge 0.6 Percent, Beating Economist’s Expectations

Also see How Did Covid Change Your Propensity to Buy Things Online?

Consumers keep spending more and more, and much of that spending is online.

Should the Fed Declare Victory?

Some people want the Fed to declare victory already, despite Core PCE inflation running at 2.9 percent year-over-year.

For discussion, please see Hoot of the Day, What is the Fed Waiting On?

I corrected the title to say the increase in spending and income rather than spending and income.

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