The U.S. Department of Commerce kicked off this week’s Money Conscious Mash Up with its June Personal Incomes and Outlays report. It showed that while inflation remains low, the pace of personal income increases was more of a dud than Kelly Osbourne wondering who will clean America’s toilets in a world without Mexicans. Personal incomes increased by 0.2 percent from May’s downwardly revised 0.7 percent. Personal savings was 4.8 percent, which suggests consumer strength and eagerness to save money. This is good because if the seven-year rumor that the Fed will raise rates does occur this September, debt will quickly become more costly.
On Thursday, Gallup reported its July U.S. Payroll to Population (P2P), which remained at 45.5 percent, inline with June’s number. This is the highest July report since Gallup started tracking P2P in 2010. This is inline with expected seasonal full-time employment and brought positive news after Challenger, Gray and Christmas’ July Job-Cuts report showed the computer and electronics sectors and, especially, the Army, weren’t all they could be.
On the heels of the circus that was The Trump Debate, The Federal Reserve Board of Governors released its June Consumer Credit Report on Friday. It showed that revolving debt (credit cards) increased 7.3 percent over May’s 2.1 percent increase and non-revolving debt (auto and student loans), also, increased 7.3 percent over May’s 7.2 percent gain.
While we’re pleased to see the near 5 percent savings rate, we’re concerned about the increase in both revolving and non-revolving debt combined with red flags in week employment data (U1 and U6 employment rates, wages). A record number of American aren’t in the labor force, which brings the employment participation rate to a 38-year low of 62.6 percent. As Ben Stein’s paternal once said, “Something that can’t go on forever won’t.” It’s like a law of physics or something.
With this in mind, we’ll continue to repeat our talking points like an aspiring presidential candidate and advise you to control unnecessary spending, save as much money as you can, pay off debts fast and invest. The first point allows for the latter points. Needle point is a money conscious hobby.
That’s this week’s Money Conscious Mash Up. Come back every Sunday for our slightly off beat take on newsworthy economic news.