Al Caicedo – Economic Downturn on the Way

from Financial Survival Network

Al Caicedo is back… Savings Rate Plunges As Consumer Spending Soars By Most In A Decade. After lagged (govt shutdown) and mixed performances in the last two months, income and spending growth was expected to rebound notably in March (despite a weak signal from within the GDP data) and while income growth was lower than expected (+0.1% MoM vs +0.4% MoM exp), spending exploded… Personal Spending rose 0.9% MoM (well above the 0.7% expected) and the biggest rise since August 2009…On a year over year basis, spending has accelerated beyond income growth once again…On the income side, wages unchanged from last month on an annual basis:Private workers +4.4% Y/Y Govt Workers +3.0% Y/Y And as expected given the surge in spending, the savings rate collapsed from 7.3% to 6.5% – the lowest since November.This is the biggest monthly drop in the savings rate since Jan 2013. At the same time the Core PCE Deflator is at its lowest since 2017…allowing ‘goldilocks’ narratives to flourish ahead of this week’s FOMC.

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