From Ian Morris of HSBC:
HSBC: US July Income/Consumption – Consumer Recession Alert
* Real July spending fell 0.4% after -0.1% in June.
* Puts Q3 real consumption on track for -1%, suggesting
downside risk to our forecast of -0.5%.
* Would make it the first quarterly decline in nearly 17 years
* Fiscal stimulus fading fast. With confidence at rock bottom,
asset deflation and rising unemployment, little hope of big
Q4 rebound, except for maybe recent fall in energy prices.
* Core PCE inflation up 2.4% over the year, still too high, but
as we pointed out in recent research (Now you see it, now you
don’t), typically rises in hard economic
landings, before declining later. Ian Morris