Stagnant Consumer Spending and Firm Inflation Put Pressure on the Fed Ahead of December Policy Meeting
Figure 7. Disposable Personal Income, Outlays and Savings Source: US Bureau of Economic Analysis)
US consumer spending came in quite lacklustre in September, reinforcing concerns that household purchasing power is being strained by persistent inflation and uneven income gains. According to the Commerce Departmentʼs Personal Income and Outlays Report, released last Friday, December 6, inflation-adjusted consumer spending was flat, mirroring the weak consumption patterns observed during the Thanksgiving weekend. While nominal income grew 0.4 percent, real disposable income increased only 0.1 percent, underscoring the pressure facing lower- and middle-income households. Unlike higher-earning Americans, who continue to drive much of the services demand, many families in the lower end of the income distribution seem to be treading water.