Personal income fell 2% in May. Spending flat. But both above prepandemic levels.
The drop in income was driven by a decline in government transfers (mostly the end of the direct checks under the American Rescue Plan). Wage and salary income rose, though more slowly than in April.
Spending on goods fell and spending on services rose, but we still haven't seen anything close to a wholesale reversal of the big pandemic shifts in spending. Have to see what happens this summer.
Sharper drop in spending on durable goods, which probably at least partly reflects the end of the ARP checks.
Personal saving fell in May, and is way down from March (when most relief checks arrived), but still well above prepandemic levels. The caveat, as always: These savings are nothing close to evenly distributed.
OK, inflation (you knew I'd get there eventually): The PCE price index rose 3.9% from a year earlier, the fastest pace since 2008. Excluding food and energy, prices were up 3.4%.
BUT
The year-over-year number is inflated by base effects (the drop in overall prices in the worst of the pandemic a year ago). The month-to-month increase in prices actually slowed. (Note chart shows annualized monthly change.)
It's interesting to look at spending in some of the most pandemic-affected categories. Restaurants (including fast food, delivery, etc) have bounced back, but everything else is still way down. Movies, live entertainment have barely even begun to recover.
Interesting to think through how much of this is capacity constraints vs health concerns vs behavior shifts (and, to the extent it's the latter, how long those last). Obviously varies substantially by category.
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Good news on inflation! U.S. consumer prices FELL 0.1 percent in June, and were up just 3 percent from a year earlier. "Core" prices, stripping out volatile food and fuel, were up 0.1 percent from May and 3.3 percent from last June. Data: …Live coverage: bls.gov/news.release/c… nytimes.com/live/2024/07/1…
This is the second straight month where there has been effectively no inflation on a month-to-month basis. Prices were flat in May, and down in June.
If you take a longer view here: At 3% year-over-year, inflation is no longer outside historical norms (though it is still higher than immediately prepandemic). And over the past three months, rents have risen at an annual rate of ***just 1.1%.***
Job openings ticked up in May (but only because April was revised down). Layoffs edged up. Quits basically flat. All consistent with a gradually slowing, but not collapsing, job market. #JOLTS
Full data: bls.gov/news.release/j…
There were 8.1 million job openings on the last day of May. That's up from 7.9 million in April, revised down from the 8.1m originally reported.
Larger story here is that openings are clearly falling quickly, even if they're still high in absolute terms. #JOLTS
There were 1.2 job openings for every unemployed worker in May. That's more or less where things stood immediately before the pandemic (when the labor market was widely viewed as strong but not overheated).
The U.S. economy slowed in the final three months of the year, but only because the Q3 number was so strong -- the 3.3% growth rate in Q4 was well above expectations and certainly offered no hints of a brewing recession. (Belated charts thread)
This is not a case where the volatile components of G.D.P. made a weak quarter look strong, as sometimes happens. Measures of underlying demand were also very strong.
For all the predictions of a recession, G.D.P. growth actually *accelerated* in 2023, and topped the prepandemic average growth rate as well.
Job openings, quits and layoffs all edged down slightly in November. Consistent with a gradually cooling labor market, but definitely no sign things are falling off a cliff. #JOLTS
Data: bls.gov/news.release/j…
There were 8.8 million job openings on the last day of November. That's down a touch from October, but only because October was revised up. Big picture: Openings are trending down (and quite quickly, at that), but are still high by historical standards. #JOLTS
The number of job openings per unemployed worker actually ticked up in November (because unemployment fell), but ignore the noise. The labor market is becoming more balanced, though the ratio is (again) high relative to the prepandemic period.
The big increase in unemployment is mostly for "good" reasons: More people working, but also more people *looking* for work. Labor force grew by 736,000. Participation rate up by 0.2 percentage points.