US: Focus on personal income and spending data – Westpac

Analysts at Westpac expect US personal income to surge by 0.4%, while they expect personal spending to print 0.5% for the month of November.

Key Quotes

“Despite very strong employment growth which has seen both the unemployment rate and underutilisation decline rapidly, wages growth in the US remains subdued. Indeed, on a real discretionary basis, household incomes are up only around 0.5%yr. It is therefore unsurprising that the savings rate has been falling.”

“While sentiment has also been supportive, the budget reality that households face is restricting spending, which slowed in the September quarter and remained subdued in October. We expect November might see a bounce in services, but risks are to the downside.”

“Inflation remains well contained. The core CPI disappointed expectations in Nov, +0.1% and the PCE variant is likely to follow suit. Energy will add in November.”