Ouch on the headline. Consumer spending near expectation may save this report from being an outright stinker.
it's a bit of a mixed bag. The headline is way off expectations but
consumer spending rose and prices held up, even taking into account the
drop in the core. It's another sign that the US economy has many
different levels and they're not all pulling in the same direction.
was better in Q2 but structure investment was very poor in both
residential and business sectors. Residential fell 6.1% vs 7.1% prior,
business -7.9% vs 0.1% in Q1. Government spending fell 0.9% from its
1.6% gain in Q1.
Durable goods took up the baton for the jump in spending.
Confidence among America's shoppers worsened in July, a private
survey confirmed on Friday, pointing to waning household confidence in
The Thomson Reuters/University of Michigan
final Consumer Confidence Index fell to 90.0 points during the seventh
month of the year, down from June's final print of 93.5, when it stepped
down from a one-year top.
A preliminary print showed the gauge at 90.4, missing original estimates that had pointed to an unchanged reading in July.
UBS Debunks "Strong Consumer" Farce Saying Consumer Credit Cycle Is In "Later Innings"
"Our analysis...seems to support the thesis that while lending is extending to riskier consumers, the finances of those consumers are not materially improving. The recipe is likely to result in consumer delinquencies that will not fall in coming quarters, consistent with our broader thesis that the credit cycle is in the later innings."
tad softer on the headline and employment slipping once again is not
good news. New orders held up well enough though. USDJPY dropped a few
pips to 102.21from around 102.35 but has recovered all that back. It
seems there's little interest still.
the income front, wages and disposable income rose 0.3% and 0.2%
apiece. For spending, durable spending was down again but non-durables
jumped 0.7% from 0.45 in May.
Nothing too shocking from the report. Lower employment and input costs are offset by better new orders.