Boom Doom Economy: USA Consumer Spending Drops (Charts) *Durable Goods, NonDurable Goods, Services purchases decrease*

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Bureau of Economic Analysis: Monthly Personal Income and Outlays

Official Statement by the U.S. Bureau of Economic Analysis (August 2, 2011) Personal income increased $18.7 billion, or 0.1 percent, and disposable personal income (DPI) increased $16.3 billion, or 0.1 percent, in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $21.9 billion, or 0.2 percent. In May, personal income increased $23.2 billion, or 0.2 percent, DPI increased $17.6 billion, or 0.2 percent, and PCE increased $5.9 billion, or 0.1 percent, based on revised estimates.

Personal Consumption Expenditures (Chart) (Seasonally adjusted at annual rates) Below is a chart of Personal Consumption Expenditures, consumer spending. Consumer spending decreased for the first time since June 2010. Current Personal Consumption Expenditures of $10.64 trillion is below the Post-Great Recession high of $10.67 trillion in May 2011. The Great Recession low was $9.75 trillion in December 2008. The Pre-Great Recession peak was $10.18 trillion in June 2008. Personal Consumption Expenditures includes all consumer spending divided in three categories: Durable Goods, NonDurable Goods, and Services (see charts further below). Personal Consumption Expenditures is a sub-category of Personal Outlays, which also includes nonmortgage interest expense and personal transfer payments.

Consumer Durable Goods Purchases (Chart) (Seasonally adjusted at annual rates) Below is a chart of Durable Goods Purchases, which has decreased for 4 consecutive months. Current Durable Goods Purchases of $1.139 trillion is below the Post-Great Recession high of $1.163 trillion in February 2011. The Great Recession low was $7.76 trillion in March 2009. The Pre-Great Recession peak was $1.178 trillion in January 2008. Consumer Durable Goods Purchases is a sub-category of Personal Consumption Expenditures (see chart above).

Consumer NonDurable Goods Purchases (Chart) (Seasonally adjusted at annual rates) Below is a chart of NonDurable Goods Purchases, which has decreased for 2 consecutive months. Current NonDurable Goods Purchases of $2.47 trillion is just below the Post-Great Recession high of $2.49 trillion in April 2011. The Great Recession low was $2.07 trillion in December 2008. The Pre-Great Recession peak was $2.38 trillion in July 2008. Consumer NonDurable Goods Purchases is a sub-category of Personal Consumption Expenditures (see chart above).

Consumer Services Purchases (Chart) (Seasonally adjusted at annual rates) Below is a chart of Consumer Services Purchases, which have increased in a somewhat stair-step manner. Current Consumer Services Purchases of $7.0399 trillion are just below the Post-Great Recession high of $7.0420 trillion in May 2011. Consumer Services Purchases trended upwards during the Great Recession and have continued to do so subsequently. Consumer Services Purchases are a sub-category of Personal Consumption Expenditures (see chart above).

Commentary June 2011 Personal Consumption Expenditures, consumer spending, dropped from the May 2011 Post-Great Recession high and was the first decrease since June 2010. All 3 components decreased: Durable Goods for the 4th consecutive month, NonDurable Goods for the 2nd consecutive month, and Services for the first time since June 2010. A continuation of the uptrend is necessary to sustain the USA economic recovery.

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