EDITOR'S NOTE: Zero Hedge reports that “wage growth for private and government workers slowed dramatically last month,” although, surprisingly, for the ninth-straight month, personal spending increased. Income growth for November came in at +0.4% MoM, while personal spending went up at a +0.6% MoM rate. This difference has caused the U.S. savings rate to plunge to its lowest level since 2017. This also caused “The Fed's favorite inflation indicator - the core PCE deflator,” to jump significantly to “5.7% YoY, the highest since June 1982.” None of this is good for the U.S. economy’s outlook in 2022, which is why Zero Hedge is imploring Fed Chairman Jerome Powell to “get back to work.”
The growth is Americans' personal spending was expected to decelerate in November, as income growth also slowed. Analysts narrated October's surprise spending gain as being driven by pull-forward on supply-chain availability fears. Analysts nailed it for once with both income and spending coming in as expected (+0.4% MoM and +0.6% MoM respectively)
Wage growth for private and government workers slowed dramatically last month...
Photo: Zero Hedge
This is the 9th straight month of spending increases, and notably far higher than the income growth. Obviously that means the savings rate is tumbling... and it just plunged to its lowest since Dec 2017!
Photo: Zero Hedge
Finally, and perhaps most importantly, The Fed's favorite inflation indicator - the core PCE deflator - soared in the last month. The headline PCE deflator hit 5.7% YoY, the highest since June 1982...
Which left real personal spending unchanged MoM, worse than the +0.2% MoM expected and well down from the +0.7% MoM in October...
Get back to work Mr.Powell.
Originally posted on Zero Hedge.