Folks, I’m sipping my coffee and reading about the latest economic news, and let me tell you, it’s a mixed bag. According to the Commerce Department, US consumers are reining in their spending as inflation remains stubbornly high. I mean, who can blame them? The cost of living is getting out of control, and people are getting a little more cautious with their wallets. The data shows that consumer spending, when adjusted for inflation, was flat from the month prior, which is a sharp slowdown from the 0.4% gain in June. Yep, it seems like people are finally feeling the pinch.
The Personal Consumption Expenditures price index, which is the gauge used by the Federal Reserve for its 2% target inflation rate, rose 0.2% from June, keeping the annual rate at 3.7%. Now, I’m no economist, but that doesn’t sound great to me. Economists were expecting the PCE price index to increase 0.1% from the month before and for the annual rate to slow to 3.6%, so it looks like they were a bit off the mark.
When you strip out volatile energy and food prices, the “core” PCE index rose 0.2% on a monthly basis and was up 3.3% from a year ago. Okay, so maybe it’s not all doom and gloom. The PCE price index is part of the Commerce Department’s monthly Personal Income and Outlays report, which includes comprehensive data on how Americans earn, spend, and save. You know, the usual stuff.
Now, here’s something interesting: the July spending pullback among US consumers coincided with a padding of their household coffers. The saving rate, which fell to a four-year low of 2.6% in June, perked up in July to 3%. Ah, so people are finally starting to save a bit more. Solid income gains helped buffer those savings last month, with after-tax income growing by 0.4%, the strongest gain since January. That’s not too shabby.
As I finish my coffee, I’m left thinking that this economic news is a bit of a rollercoaster. One month it’s up, the next month it’s down. But hey, at least people are saving a bit more, right? In conclusion, it seems like US consumers are being a bit more cautious with their spending, and inflation is still a concern. But with solid income gains and a higher saving rate, maybe we’re not heading for disaster just yet. And that’s a good thing, because I don’t think my coffee budget can take much more of this economic uncertainty 🙃.
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
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