STELLAR SPENDING

While US consumer spending remains strong, incomes are not keeping up. Inflation-adjusted Y-o-Y income growth has slid from 5.3% a year ago, to 3.8% in 12/23 to 1% now, while real spending is up 2.6% Y-o-Y, a huge 1.6 percentage point gap. As a result, savings rates are plummeting from 4.8% a year ago, 3.5% three months ago, to 3.4% now, the lowest since 12/22. I’m concerned.