Personal income and spending posted modest gains in today’s October update from the US Bureau of Economic Analysis (BEA), albeit at monthly rates (+0.2% on both counts) that fell short of the crowd’s expectations. The usual suspects will fuss over the monthly comparisons and try to spin context out of noise with the data, but there’s more than one way to slice and dice the numbers. As an antidote to the standard routine, let’s focus on the annual trend for what is arguably the more relevant data set in today’s report: private-sector wages, which continue to rise at an encouraging and stable rate of roughly 5%.
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Clarity is a virtue when it comes to the business cycle. It’s also unusual. The US is an exception, or at least it has been, according to Scott Sumner, an economist at Bentley University and a prolific blogger on macro matters. “The US has a really weird economy,” he writes. “All our recessions are 100% clear-cut. Either we have a recession or we don’t. Normal countries have borderline recessions. Not us.” But this uncommon trait “is about to end, and very soon we’ll have debatable recessions,” Sumner advises. If he’s right, macro analysis—looking for signs of major shifts in the economic trend in particular—will be a lot tougher.
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● US GDP grows at better-than-expected 3.9% pace in third quarter | LA Times
● UK GDP growth confirmed at 0.7% for Q3 | Marketwatch
● Bank of England will raise rates despite euro gloom, says Mark Carney | Telegraph
● Saudis signal no push for oil cut as market to ‘stabilize itself’ | Reuters
● France Consumer Confidence Posts Unexpected Rise | MNI
● Italy’s consumer confidence continues decline | Marketwatch
● U.S. (Mostly) Wins With Strong Dollar | Bloomberg
● Emg Mkt Portfolio Inflows Rebound in November | IIF