Tomorrow could see data released that could clarify some inconsistencies and offer some guidance to the Fed. Recent data trends show that the US consumer is resilient despite indicators of productivity like Empire Manufacturing and PMIs turning downward.
Reports from the major US banks JPMorgan and Bank of America, which show that Americans are increasing their debt-related spending, can explain a part of it. While credit card balances are increasing, savings have declined. Of course, that isn’t sustainable, and it also doesn’t explain the very low unemployment rate as inflation rises.
Tomorrow’s key point on consumer behavior will be Personal Spending vs. Personal Income. Spending, of course, drives demand for products which could help improve productivity – but if productivity isn’t increasing, it could drive demand. In order to attract workers, businesses will increase their prices to meet increased demand.
The Personal Income will slow down to 0.4% in monthly growth. From 0.6% in January These figures do not include January’s 0.6%