“Notably, rise in disposable income did not translate into a rise in consumption.” Peter, are there any data sets- maybe from consumer surveys - indicating that people are saving up for major purchases, such as houses or new cars?
Also, we get a new captain at the helm of the Fed in a few weeks. He had probably planned on aggressive interest-rate action to bring the Fed more in line with Trump’s agenda, but that was before the Epic Fury campaign drove oil prices up. What action would you now figure the Fed will implement?
If people receive a boost in disposable income but do not increase consumption, they are either paying down debt or they are saving (in an economic sense the difference between the two is less significant than we might think). The lack of consumption commensurate with disposable income is the data for your question.
This is also why lack of consumption is a potential economic problem. Postponing consumption means demand is shifting down across the entire curve, and that represents economic contraction in every scenario.
As for what the new Fed Chairman will do differently, I would prefer not to speculate. Personnel may be akin to policy, but it is not akin to policy outcomes.
“Notably, rise in disposable income did not translate into a rise in consumption.” Peter, are there any data sets- maybe from consumer surveys - indicating that people are saving up for major purchases, such as houses or new cars?
Also, we get a new captain at the helm of the Fed in a few weeks. He had probably planned on aggressive interest-rate action to bring the Fed more in line with Trump’s agenda, but that was before the Epic Fury campaign drove oil prices up. What action would you now figure the Fed will implement?
If people receive a boost in disposable income but do not increase consumption, they are either paying down debt or they are saving (in an economic sense the difference between the two is less significant than we might think). The lack of consumption commensurate with disposable income is the data for your question.
This is also why lack of consumption is a potential economic problem. Postponing consumption means demand is shifting down across the entire curve, and that represents economic contraction in every scenario.
As for what the new Fed Chairman will do differently, I would prefer not to speculate. Personnel may be akin to policy, but it is not akin to policy outcomes.
You always give such intelligent replies, Peter. I appreciate it!