• 10 hours Can Toyota's Hydrogen Car Take On Tesla?
  • 1 day Why Universal Basic Income Won't Work
  • 2 days Is This The Real Golden State?
  • 2 days Blockchain Firm Pushes For Ethical Mining
  • 3 days America’s Working Class Are Footing All The Bills
  • 3 days Market Volatility Sends Investors Scrambling Into This Asset Class
  • 3 days How Much Energy Would It Take To Power The Death Star?
  • 4 days A Tweet About Hong Kong Could Cost The NBA $4 Billion
  • 4 days World's Largest Miner Doubles Down On Renewables
  • 4 days Nasdaq Cracks Down On Small Chinese IPOs
  • 5 days Is There Any Reason To Be Bullish About Netflix?
  • 5 days Precious Metals See Record Inflows As Investors Hedge Against Teetering Economy
  • 5 days NYU Professor: Tesla Could Lose 80% Of Its Value
  • 6 days Uber To Offer On Demand Employment
  • 6 days SoftBank Reeling After Questionable WeWork Investment
  • 6 days Opportunity Arises In The Democratic Republic Of Congo
  • 8 days Peter Thiel’s Promised Land For Intellectual Troublemakers
  • 8 days Why Gold Stocks Are Drifting Lower
  • 9 days Copper Miners Feel The Squeeze As Prices Slip Once Again
  • 9 days Uncovering The Universe’s Biggest Secrets
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Household Spending Growth Expectations Plunge; Recession Already Started?

Every month the Fed does a Survey of Consumer Expectations for inflation, earnings growth, income growth, and consumer spending growth.

In the microeconomic data overview, the Fed provided charts for the first three sets of expectations. I downloaded the data and created my own chart of spending expectations.

First let's consider some details from the report. Emphasis mine.

The results from the April 2015 Survey of Consumer Expectations indicate that one-year ahead inflation expectations fell while three-year ahead inflation expectation increased. The median one-year and three-year ahead expected rates of inflation now stand at 2.7% and 3.0%, respectively. While earnings and household income growth expectations were largely unchanged, median household spending growth expectations retreated significantly from the last month.


Inflation Expectations

Inflation Expectations


Earnings Expectations

Earnings Expectations


Income Expectations

Income Expectations


Household Spending Expectations

Household Spending Expectations


Spending Analysis

In spite of rising earnings and income estimates, "median household spending growth expectations retreated significantly from the last month" in the Fed's words.

In general, I do not place much faith in these estimates, especially inflation expectations. That said, the spending estimates do ring true with weak economic data that we have seen for six months.

Should these spending projections prove to be correct, a US recession that few if any economists see coming, has already started.

 

Back to homepage

Leave a comment

Leave a comment