Personal Income gained .2% in February, spending advanced .1% both numbers came in weak while price pressures as measured by the PCE or Personal Consumption Expenditures index fell .1% for the month as the annualized rate slipped to 1%. Weak income and spending data further reduced the Atlanta Fed’s GDPNow model slashing it to just .6% for the 1st quarter after January’s spending surge got revised away.
So again despite emergency level interest rates, trillions in stimulus and an official unemployment rate of just 4.9% we struggle to maintain economic growth of 2% as consumer spending remains weak which helps to hold down prices aka inflation as seen with the assorted price metrics. Worse corporate earnings are increasingly showing that cost cutting and share buy backs are rapidly losing their thunder as the stock markets failure to advance meaningfully of late shows coming under increasing pressure from a lack of sales, aka revenue or consumer spending.
This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.
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