Transcript
Consumer Economic TrendsMarch 2016
ChuckMcKayckmckay@me.com
Consumer Economic Trends – March 2016
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Summary• Recentconsumereconomicindicatorshavebeendecidedlymixed
keepingtheFedonhold• Januarydisposableincomewasup0.5%,butFebruaryaverageweekly
earningsdeclined0.1%• Consumerspendingwasup0..5%inJanuary,retailsalesdeclined0.1%
inFebruaryandJanuary’spreviouslyreportedgainwasreviseddowntoadeclineof0.4%
• Februaryjobgainswerestrongat242,000plustherewereupwardrevisionstopriormonths.Andthebroaderemploymentratioscontinuedtheirpositivetrends
• Consumerspausedtheirrecentrunofrevolvingdebtincreaseswhichcouldexplainthedipinretailsales
• Februaryconsumersentimentwasessentiallyunchangedat91.7stillwelldownfromthe12monthhighof96.1inJune
• OfsomeconcernisthecontinueddeclineinsmallbusinessoptimismwhichisnowatitslowestlevelsinceFebruary‘14
ListofCharts1. Disposableincome2. Consumerspending3. Retailsales4. Ecommercesales5. Jobsgrowthvs.UIclaims6. Employmentratios7. Wagegrowthvs.inflation8. Revolvingcredit9. Purchasevolume10. Consumersentiment11. Smallbusinessoptimism
Disposable personal income growth gained significantly in January, but still remained tepid at 4.0% year-over-year
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17.0%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Personal Income and Savings
Disposable Personal Income Y/Y Growth% Personal Savings Rate % Tax Burden % Personal Income (right scale)
Source:BureauofEconomicAnalysis
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January consumer spending year-over-year growth jumped in January as the decline in gasoline prices was lapped easing the drag on nondurables spending
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-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
10%
'11 '12 '13 '14 '15 '16
Nominal Consumer Spending Growth Y/Y%
Total Consumer Spending
Durable Goods
Nondurable Goods
Services
Nondurable Goods ex. Energy
Source:BureauofEconomicAnalysis
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February retail sales growth disappointed and January’s unexpected gain was revised to a decline. Gasoline station sales growth dipped but remained on a more positive trajectory due to the lapping of the decline in gasoline prices
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-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
'11 '12 '13 '14 '15 '16
Retail Sales Growth Y/Y%
Total Retail Sales Excluding Autos Ex. Autos & Gasoline Stations Gasoline Stations (right scale)
Source:CensusBureau
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During the last four quarters e-commerce contributed over 55% of retail sales growth… falling gasoline sales has accelerated e-commerce’s growth impact
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-45%
-30%
-15%
0%
15%
30%
45%
60%
75%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
'07 '08 '09 '10 '11 '12 '13 '14 '15
E-Commerce Sales Growth Y/Y%
Total Retail Sales E-commerce Total ex. E-commerce E-commerce Overall Growth Contribution 4Q Average (right scale)
Source:CensusBureau
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February’s jobs gains were better than forecasted, reversing January’s disappointing result. Initial claims remain historically low… 12 month average job gains at early ‘06 levels
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250 280 310 340 370 400 430 460 490 520 550 580 610 640 670 700 -900
-800-700-600-500-400-300-200-100
0100200300400500600
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Monthly Employment Gains vs. Unemployment Claims (Thousands)
Monthly Payroll Employment Gains 4 Week Moving Average Unemployment Claims (right scale inverted)
Source:BureauofLaborStatistics
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The broader employment ratios have trended positively for the past several months, a sign of a strengthening labor market
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1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
57%
58%
59%
60%
61%
62%
63%
64%
65%
66%
67%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Employment Ratios
Labor Force Participation Rate Employment-Population Ratio Unemployment Rate (right scale)
Source:BureauofLaborStatistics
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Wage growth dipped unexpectedly in February dampening some of enthusiasm of an otherwise positive jobs report
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-1%
0%
1%
2%
3%
4%
'10 '11 '12 '13 '14 '15 '16
Wage Growth vs. Inflation
Average Hourly Earnings Y/Y Growth CPI Y/Y % Change Core CPI Y/Y % Change
Source:BureauofLaborStatistics
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Revolving credit growth has accelerated since early ‘14; however, as a percentage of disposable income revolving credit has remain stable at ~2ppt below its pre-recession level
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-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
$800
$825
$850
$875
$900
$925
$950
$975
$1,000
$1,025
$1,050
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Consumer Revolving Credit Consumer Revolving Credit Outstanding
Consumer Revolving Credit Y/Y% Growth (right scale)
Consumer Revolving Credit as a % of Disposible Personal Income (right scale)
Source:FederalReserve,Bureau ofEconomic Analysis
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Billions
Q4 payment card purchase volume growth was stable at 8.3%
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-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'08 '09 '10 '11 '12 '13 '14 '15
Purchase Volume Growth Y/Y%
Source:AXP,DFS,MA,VCompanyReports
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Consumer sentiment remained essentially unchanged and seems to be unable to gain much momentum
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-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
40
50
60
70
80
90
100
110
120
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Consumer Sentiment
University of Michigan Consumer Sentiment Y/Y% Change (right scale)
Source:BureauofLaborStatistics
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Small business optimism declined 1.0ppt from January and is now at its lowest since February ’14. The index has dropped 7.5ppt from its post recession peak
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80
85
90
95
100
105
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Small Business Optimism
NFIB Small Business Optimism Index 6 Month Moving Average
Source:NationalFederation ofIndependent Business
Return
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