Consumer Spending Is Kind of Meh

The Wall Street Journal doubled down today on the notion that consumer spending is strong:

U.S. households ramped up their spending in July, providing reassurance that the economy’s decadelong expansion continued to roll despite slowing factory activity and global growth. Personal-consumption expenditures, a measure of household spending, increased a seasonally adjusted 0.6% in July from June, a pickup from the previous two months, the Commerce Department said Friday, continuing a solid performance by the economy’s main driving force.

First of all, this isn’t adjusted for inflation, even though real numbers are released at the same time as nominal numbers. Second, take a look at monthly growth in consumer spending over the past couple of decades:

It’s all noise. There’s no way to pull any useful information out of this. If, instead, you compare year-over-year growth—which makes more sense in the first place—you get this:

There’s still some noise, but there’s also a clear signal: consumer spending grew in July at about the rate as June and May and April and March. It’s actually a little below the average of the past couple of years.

I should note that this works in both directions. If you look at personal income, it didn’t increase at all between June and July. It was completely flat. Bad news! But if you look at year-over-year growth, things look a little different:

Income growth has been showing some decleration over the past year, but it’s still pretty positive.

I know this stuff seems kind of tedious, but it matters if you really want to know the state of the economy. The Journal summary of July is that consumer spending was strong but income growth was weak. In reality, they were both fairly average.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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