Real Spending Flat in May, Revisions Lower April Income and Spending

Economists missed the mark badly. They expected a rise in real spending of 0.2%. Revisions make the miss even worse.

The BEA 's Personal Income and Outlays report for May shows Real DPI increased 0.2 percent in May and Real PCE decreased less than 0.1 percent.

The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

Revisions

Expectations

Here are the Personal Income and Outlays expectations by Econoday for May.

Economists hit the mark for income, but missed badly on spending. Real spending was flat (Consumer Spending Minus Price Index).

Revisions make the miss even worse.

With yesterday's GDP report, I noted that it was nearly July but we were looking at first-quarter GDP numbers. I also noted that some of the second quarter reports were only 1/3 in. This was the major one.

This report will be a major blow to 4% and some 5% GDP estimates for the second quarter.

Mike "Mish" Shedlock

Comments (6)
No. 1-6
Realist
Realist

Trumps cheerleaders are expecting 6% and more. Trump himself claims he has released an “economic miracle”! The US is going to have to open the floodgates to immigrants in order to fill all the jobs he is creating! Personally, I’ll stick with my 2% predictions going forward.

Casual_Observer
Casual_Observer

I will go with 2.5 to 3%. Followed by 1% next quarter and recession thereafter. Once we hit stall speed the bottom will drop out because of multiple crises in bond markets.

Realist
Realist

I don’t predict a single quarter. I always project over 1-2 years. Anything shorter is too volatile. Anything longer is too difficult. I will continue to predict 2% over the next 1-2 years. I will leave quarterly predictions to you Mish. Hi Casual Observer. Your 2nd quarter prediction is probably close, but who knows. I don’t expect a recession unless Trump starts a full-blown Trade war. I still expect cooler heads to prevail, but given what a moron Trump is, you never know.

lol
lol

gdp will never be negative again {ever}the unemployment "rate" will never rise,we will never hava another "official" recession.The ministry of propaganda started under el presidente Obama and his sandanista regime and continuing under el presidente trump by taking a page out of the Caracas playbook... there will be no (not ever)negative economic numbers.Permanent economic growth,Permanant "recovery"forever (on paper)!

bradw2k
bradw2k

That would be the logical trend. CPI doesn't really measure inflation; GDP doesn't really measure aggregate production; and U3 doesn't really measure employment levels. These statistics are already "damn lies." And who has a stake in nudging them? The powerful, who need voters to go along; and economists, who have invested their careers in non-objective theory.