Econ chart book july 2016

Consumer Economic TrendsJuly 2016 Chartbook

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Consumer Economic Trends – July 2016

7/28/16 ConsumerEconomicsChartbook - CKMcKay 2

Summary• TheU.S.economycontinuestobeabittenuousandassuchremains

highlysusceptibletoshocks:Brexit,politicalturmoil,terrorism,etc.• DuringJunedisposableincomewasup0.2%andaverageweekly

earningsincreased0.3%• Consumerspendingwasup0.4%inMay,retailsalesincreased0.6%in

June.Gasolinestationsalesarestillasignificatedragonthetotals• Junejobgainswerestrongat287,000;adramaticturnaroundfrom

May’sabysmal11K.Howeverthebroaderemploymentratiosslidduringthesecondquarter

• Consumersrevolvingdebtcontinuedtoincreasebutataconsistentwhichkeptthedebttoincomerationstable

• PreliminaryJulyconsumersentimentdipped4ptsto89.5onBrexitandstockmarketconcerns.TheConferenceBoard’sconsumerconfidenceindex,measuredafterthestockmarkethadrecovereditsBrexitlosses,wasessentiallyunchangedfromJune

• Smallbusinessoptimismhastickedupmodestlyoverthesecondquarter,butisstillbelowitspostrecessionhigh

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

Annual disposable personal income annual growth slipped to 4.1% in May. The savings rate fell similarly. Since the beginning of ‘14, disposable personal income has grown at a 4.0% annual rate


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

Return

May consumer spending grew 0.4% and year-over-year growth 3.7%. Reported goods spending growth was volatile in the first 5 months of ‘16 as the BEA seems to be struggling with its beginning of the year seasonal adjustment factors


-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

Return

Retail sales gained 0.6% in June. Year-over-year growth increased to 2.7%. Gasoline station sales grew 1.2% in June. The decline in gasoline station year-over-year sales remained better than -10%


-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 60% of retail sales growth… falling gasoline sales has accelerated e-commerce’s growth impact


-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 '16

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

Return

June jobs gains (287K) rebounded sharply from June’s disappointing 11K. Initial claims remain historically low… 12 month average job gains (204K) edged back over 200K. May’s 199K 12 month aveage broke the 200K+ streak that began in April ‘14


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

Return

The broader employment ratios reversed Q1’s positive trend in Q2 as both the labor force participation rate and the employment-population ratio fell


1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

57%

58%

59%

60%

61%

62%

63%

64%

65%

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67%

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

Employment Ratios

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


Return

Wage growth was up only 0.2% in June, however the y/y trend showed improvement during 2Q. June y/y wage growth was 2.6% equaling the post recession high


-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


Return

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


-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

Return

Billions

Q2 payment card purchase volume year-over-year growth slid 1.4ppt to 7.9%


-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

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12%

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Network Payment Card Purchase Volume Growth Y/Y%

Source:AXP,DFS,MA,VCompanyReports

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The preliminary Consumer Sentiment index fell in large part due to economic concerns and stock market losses (which have subsequently reversed) following the Brexit vote


-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

40

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

Consumer Sentiment

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

Source:UniversityofMichigan

Return

Small business optimism declined 0.7ppt from June. The third consecutive monthly gain although the six month moving average continued its downward trajectory since the index topped 100 in Dec. ‘14


80

85

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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

Econ chart book july 2016

Economy & Finance

Transcript of Econ chart book july 2016