Consumer Economic Trends: February 2017

Consumer Economic TrendsFebruary 2017 Chartbook

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Consumer Economic Trends – February 2017

2/6/17 ConsumerEconomicsChartbook- CKMcKay 2

Summary• ConsumerandsmallbusinessoptimismsoaredinJanuarywithboth

indicesreaching12yearhighs.TheU.S.economygrewa1.9%inQ4downfromarevised3.5%gainin3Q

• DuringDecemberdisposableincomewasup0.3%,butaverageweeklyearningsgrewonly0.1%inJanuary‘17

• Consumerspendingwasup0.5%inDecemberandretailsalesgrew0.6%.Thedragfromgasolinestationsaleshasrunitscourse

• Januaryjobgainswereastrong227,000liftingthetwelvemonthaverageto195,000butbelowthe217,000averagefromayearago.ThebroaderemploymentratiosstrengthenedinJanuary

• Consumerrevolvingdebtgrowthrose0.4pptto6.4%inNovember,thehighestannualgrowthratesincebeforetherecession

• Januaryconsumersentimentroseto98.5,onamoreoptimisticoutlookforjobsandtheeconomy

• Smallbusinessoptimismindexsurged7.4pointsto105.8inDecember.Thegainwasdrivenbyimprovedexpectationsforsalesgainsandoutlookforbusinessconditions

ListofCharts1. Disposableincome2. Consumerspending3. Retailsales4. Ecommercesales5. Jobsgrowthvs.UIclaims6. Employmentratios7. Wagegrowthvs.inflation8. Revolvingcredit9. Purchasevolume10. Consumersentiment11. Smallbusinessoptimism

Annual disposable personal income growth fell 0.1ppt to 3.7% in December. The savings rate ticked down 0.2ppt to 5.4%. For nearly two years annual income growth has hovered slightly below 4%


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Personal Income, Savings and Taxes

Disposable Personal Income Y/Y Growth% Personal Savings Rate % Tax Burden % Personal Income (right scale)

Source:BureauofEconomicAnalysis

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Annual consumer spending growth advanced 3ppt to 4.5% in December led by continued strength in durable goods purchases and the end of the gasoline spending drag on non-durables spending


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Nominal Consumer Spending Growth Y/Y%

Total Consumer Spending

Durable Goods

Nondurable Goods

Services

Nondurable Goods ex. Energy

Source:BureauofEconomicAnalysis

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Retail sales grew 0.6% in December and year-over-year growth increased 0.2ppt to 4.1%, the highest rate since Nov. ‘14, as gasoline station sales increased 2.0%. Y/Y gas station sales were up 6.4% the the rate since October ‘12


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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 54% of retail sales growth


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E-Commerce Sales Growth Y/Y%Note: This chart is updated quarterly

Total Retail Sales E-commerce Total ex. E-commerce E-commerce Overall Growth Contribution 4Q Average (right scale)

Source:CensusBureau

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Jobs gains rose to 227K in January. The three month average job gains was up slightly to 183K. Annual average job gains were 195K, up 8K from December


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'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

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 unemployment rate ticked to to 4.8% in January driven by an increase in the labor force. Both the labor participation rate the the employment population ratio increase by 0.2ppt and are at or near their two year highs


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Employment Ratios

Labor Force Participation Rate Employment-Population Ratio Unemployment Rate (right scale)


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Annual wage growth fell 0.3ppt in January, but remained relatively strong at 2.5%. Annual inflation rose above 2% for the first time since May ‘14


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Wage Growth vs. Inflation

Average Hourly Earnings Y/Y Growth CPI Y/Y % Change Core CPI Y/Y % Change


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The annual revolving credit growth rate climbed 0.4ppt to 6.4% in November. As a percentage of disposable income, revolving credit growth edged up to 7.0%; still ~2ppt below its pre-recession level


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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,BureauofEconomicAnalysis

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Billions

Q4 payment card purchase volume year-over-year growth ticked up 0.5ppt to 6.6%


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Network Payment Card Purchase Volume Growth Y/Y%

Source:AXP,DFS,MA,VCompanyReports

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The Consumer Sentiment index rose to 98.5 in January. The highest level in 12 years on a more optimistic outlook for jobs and the economy


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Consumer Sentiment

University of Michigan Consumer Sentiment Y/Y% Change (right scale)

Source:UniversityofMichigan

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Small business optimism index surged 7.4 points to 105.8 in December. The index is now at its highest level since 2004. The gain was driven by improved expectations for sales gains and outlook for business conditions


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Small Business Optimism

NFIB Small Business Optimism Index 6 Month Moving Average

Source:NationalFederationofIndependentBusiness

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Consumer Economic Trends: February 2017

Economy & Finance