Econ chart book september 2016

Consumer Economic TrendsSeptember 2016 Chartbook

[email protected]

Consumer Economic Trends – September 2016

9/7/16 ConsumerEconomicsChartbook- CKMcKay 2

Summary• TheU.S.economyfailedtogainmomentumin2Qasfallinginvestmentwasnot

offsetbystrongconsumerspending.Also,thepoorreadingfortheAugustISMmanufacturingindexcombinedwithdisappointingproductivityresultindicatesthattheeconomyisnotpoisedforaquickturnaround.Uncertaintyovertheelectionandworldaffairsingeneralisrestrainingbusinessinvestmentwhichwillfurtherslowgrowth

• DuringJulydisposableincomewasup0.4%,butaverageweeklyearningsdeclined0.2%inAugust

• Consumerspendingwasup0.3%inJulybutretailsaleswereunchangedfromJune.Gasolinestationsalesarestillasignificatedragonsalesgrowth

• Augustjobgainsweremodestat151,000;asignificantdropfromthestrongreadingsof271,000and275,000inJuneandJuly.ThebroaderemploymentratiosshowslightimprovementinAugust

• Consumersrevolvingdebtcontinuedtoincreaseupabrisk5.4%inJune.However,thedebttoincomeratioremainedstableandbelow7%

• Consumersentimentslipped0.2to89.8.Consumerconcernscenteredonslowincomegainsamidrisingexpenses

• Smallbusinessoptimismedgedup0.1inJuly,butisstillwellbelowitspostrecessionhigh

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

Annual disposable personal income growth increased to 4.4% in July. The savings rate ticked up to 5.7%. Since the beginning of ‘14, disposable personal income has grown at a 4.3% 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

Consumer spending grew strongly in 2Q partially offsetting the very weak investment result. During July spending increased only 0.3% and year-over-year growth was 3.9%. Energy continues to have a negative effect on spending


-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 were flat in July and year-over-year growth fell to 2.3% as Q3 consumer spending got off to a slow start. Gasoline station sales declined 2.7% in July. The decline in gasoline station year-over-year sales remained worse 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

Return

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

August jobs gains (151K) were significantly below June’s and July’s strong numbers. The 3Q average was a solid 232K. The 12 month average job gains (204K) remaind slightly over 200K. Initial claims remain historically low. But revised 2Q labor productivity was down 0.6%


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 stabilized in early 3Q after Q2’s decline. But ’16 has been unable to sustain the positive trend in the employment-population ratio seen during ‘14-’15


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)


Return

Wage growth was up only 0.3% in August after a strong 0.8% gain in July. Y/Y growth declined to 2.4% from 2.7% in July which was 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,BureauofEconomicAnalysis

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%

10%

12%

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

Network Payment Card Purchase Volume Growth Y/Y%

Source:AXP,DFS,MA,VCompanyReports

Return

The Consumer Sentiment index continues to hover around 90 as consumers move from one concern to another


-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:UniversityofMichigan

Return

Small business optimism index ticked up 0.1 in July. The fourth consecutive monthly gain. The six month moving average stopped its slide plateauing at 93.7. However, the index remains well below its post recession high of 100.4 reached in Dec. ‘14


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:NationalFederationofIndependentBusiness

Return

Econ chart book september 2016

Economy & Finance

Transcript of Econ chart book september 2016