Consumers Stingy, Home Sales Rebound: U.S. Economic Takeaways

What you need to know about Monday’s U.S. economic data:

PERSONAL INCOME AND SPENDING (FEBRUARY)

  • Spending rose 0.1 percent for third month after January outlays revised sharply lower from previously reported 0.5 percent gain
  • Inflation-adjusted spending climbed 0.2 percent after no change (previously reported up 0.4 percent)
  • Personal incomes increased 0.2 percent after 0.5 percent advance
  • Saving rate rose to one-year high of 5.4 percent from 5.3 percent

The Takeaway: Consumers remain stingy, taking their income gains and boosting the saving rate to its highest since February 2015. Inflation-adjusted spending on merchandise has declined in each of the last three months, the first time that’s happened in a year. The sum of all the parts: Plenty of Wall Street economists marked down estimates for first-quarter economic growth. Economists at Morgan Stanley moved their tracking estimate for gross domestic product to a 0.6 percent gain from 1 percent, while those at Macroeconomic Advisers took their forecast to 1 percent from 1.5 percent. The Atlanta Fed’s GDPNow estimate was lowered 0.6 percent, down from 1.4 percent. The economy expanded an annualized 1.4 percent in the fourth quarter.

Bloomberg

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.