Main takeaways:

  • Income and spending trends broadly unchanged when comparing to the previous report.
  • Slowdown in consumption in September/October is due to energy:
    • Consumption of energy goods and services dropped 8.9% (not annualized) since August.
    • Excluding energy, consumption rose 0.6% in the two months (3.8% annualized).
  • Consumption and income seem to have weathered well the spike in financial conditions.
  • Nominal (real) disposable income trend growth in the last 12 months growing at 4.2% (3.4%) and consumption trend growth at 3.7% (2.8%).
  • Core nominal (real) consumption (ex food and energy) growing at 4.5% (3.2%) in the last 12 months.


Personal consumption excluding energy keeps growing...
...in current prices...

...and volumes.

So the slowdown in the previous couple of months is entirely due to energy. This mirrors the conclusion I had when looking only at the narrower retail sales data (US Retail Sales -- trend remains unchanged.

Income and spending (ex energy) are growing at roughly the same pace. But the slower pace of growth in total consumption (including energy) means savings rate is increasing.


Disposable income seems to be in a steady trend, while household consumption rebounded from the lows early in the year and is back to its previous trend growth.

Chart 1a) Income and expenditures, nominal, since 2010


The growth trend in the last 12 months for disposable income rose to 4.2% in October (3.3% in September and 3.1% in June), while the growth trend for consumption moved up to 3.7% (from 3.6% in September and 2.6% in June).

Cart 1b) Income and expenditures, nominal, last 2 years


Chart 2a) Income and expenditures, volume, since 2010


When looking at volumes (constant prices) the trend growth in real disposable income rose to 3.4% in October (from 2.9% in September and 3.2% in July), while real consumption slowed to 2.8% (vs 3% in September and 2.8% in July).

Chart 2b) Income and expenditures, volume, last 2 years



The chart below shows slightly different measures of income. Overall, all measures are growing at or above 5% in the last 6 months!

Chart 3a) Different measures / concepts of household income, since 2010


Chart 3b) Different measures / concepts of household income, last 2 years



The chart below shows that almost all the recent stagnation in consumption was due to 'energy' consumption.

Chart 4a) Household consumption, core vs total, nominal, since 2010


Chart 4b) Household consumption, core vs total, nominal, last 2 years


Chart 4c) Household consumption, core vs total, volumes, since 2010



Chart 4d) Household consumption, core vs total, volumes, last 2 years


Breaking household consumption into goods and services show that the recent soft patch was entirely due to goods consumption -- but take a look in the chart of volumes: it shows goods consumption growing faster than services.

Chart 5a) Goods and services consumption, nominal, since 2010



Chart 5b) Goods and services consumption, volume, since 2010



Digging further into goods consumption it is evident that most of the hit happened in nondurable (which includes gasoline), but when adjusting for prices nondurable goods seem to be back to the previous growth trend.

Chart 6a) Goods consumption (durables and nondurables), nominal, since 2010



Chart 6b) Goods consumption (durables and nondurables), volume, since 2010



Chart below focus only on nondurable goods (volume) to better spot the trends.

Chart 6c) Goods consumption (nondurables), volume, since 2010