FAST FIVE: Fed's Favorite Inflation Signal Surges At Fastest Pace In 30 Years As Spending, Income Rise

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Fed's Favorite Inflation Signal Surges At Fastest Pace In 30 Years As Spending, Income Rise Following May's weaker than expected data on Americans' income and spending, analysts expected more weakness in income and a small bounce in spending in June, however both saw improvement with Personal Incomes rising 0.1% MoM (-0.3% exp) and Personal Spending up 1.0% MoM (+0.7% exp).

May's income was revised down from -2.0% to -2.2% MoM and spending revised lower from -0.4% to -0.6% MoM.

Source: Bloomberg On the income side, private wages are up 11.5% YoY while government workers' wages are rising at a record 8.1% YoY.

All of which means the savings rate tumbled (to 9.4%, the lowest since Feb 20202, pre-COVID) Remember when the world's prognosticators crowed of the pent-up demand coming any minute from the $2.5 trillion in excess savings.

Source: Bloomberg This was slightly lower than expected (if that is any silver lining) but still doesn't look very transitory.

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