Friday, March 28, 2008

Personal Spending Flat

From marketwatch:

U.S. consumer spending was flat in February after adjusting for inflation, the third consecutive month of weak consumer demand, the Commerce Department reported Friday.

Real consumer spending has risen less than 0.1% seasonally adjusted since November, a clear sign that the main engine of U.S. economic growth is stalling as job growth wanes and house prices tumble.

Real consumer spending is on track to rise 0.8% annualized for the first quarter, economists said. "The plunging confidence numbers clearly point to an outright decline in the second quarter," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics.

Let's look at some pertinent charts

The real year over year change in disposable income has been dropping for a while now and is now lower at pretty dangerous levels.

Year over year change in consumption expenditures are also dropping.

Consumer confidence and sentiment are dropping as well.

For an economy the depends on consumer spending, these are not good developments.