In the breakdown of consumer purchases, spending on non-durable goods which include food and gasoline was up 2.0 pct, while spending on durables rose just 0.3 pct.
The same pattern appears in the inflation statistics. The PCE index for non-durables rose 1.4 pct, while the price indexes for durables actually fell 0.2 pct, and the index for services was up 0.3 pct.
That suggests the 1.1 pct spending jump was inflated by the price effects of more expensive energy and food. Real, inflation-adjusted spending was up just over half as much, 0.5 pct.
Worse still for consumers, their disposable personal incomes — after inflation and taxes — fell 0.3 pct, the worst reading since a minus 0.6 pct in April of this year.
So yes, maybe more credit card debt, and maybe way more cc interest because of rate increases on borrowers, but all in all, just another chapter in confuse and confound the american public.
