Patrick Chovanec Profile picture
Private sector economic advisor. Author of the newly released book “Cleared for the Option: A Year Learning to Fly”. https://t.co/vhcQrJq9n3. #avgeek

Jul 8, 2021, 6 tweets

US personal income fell -2.0% m/m in May, up +2.8% from a year ago, which put it back down close to trend following another big stimulus-driven spike.

US consumer spending was flat in May, but still up +18.9% compared to the COVID shutdown a year ago. The absolute numbers (below) show it roughly recovered to pre-COVID trend.

The US personal savings rate declined to 12.4%, after an unprecedented spike during COVID, though it remains at levels not seen since the early 1980s.

The PCE price index rose +0.4% m/m in May, up +3.9% from a year ago, its highest y/y rate since August 2008.

The Core PCE price index (excluding food and energy) rose +0.5% m/m in May, up +3.4% from a year ago, its highest y/y rate since July 1991.

As the charts show, obviously some perspective is in order when we make comparisons to 1970s inflation.

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