October 3, 2016

August Consumer Spending Declined in Real Terms; Restaurant Industry Is in Contraction, Again

Filed under: Economy,Taxes & Government — Tom @ 12:44 pm

In a report released on Friday, the government reported that “(seasonally adjusted) Real DPI disposable person income) increased 0.1 percent in August and Real PCE (personal consumption expenditures) decreased 0.1 percent.”

In other words, we’re back to flatness:


July’s increase in real PCE was reduced from 0.4 percent to 0.3 percent.

This is not good news for those hoping for a significant third-quarter improvement in economic growth from the first half’s miserable 1.1 percent.


UPDATE: There’s related bad news from the restaurant industry (HT Zero Hedge) —

RPI drops into contraction territory

Due in large part to declines in both same-store sales and customer traffic, the National Restaurant Association’s Restaurant Performance Index (RPI) fell below 100 in August. The RPI stood at 99.6, down 1.0 percent from a level of 100.6 in July.

“Broad-based declines in the current situation indicators caused the RPI to fall below 100 for the first time in eight months,” said Hudson Riehle, senior vice president of research for the National Restaurant Association. “Restaurant operators reported soft sales and traffic in August, along with corresponding dips in the labor indicators. While the Expectations component of the index remains in expansion territory, it too has trended downward in the past several months.”

operators reported a net decline in customer traffic. Only 21 percent reported an increase in customer traffic between August 2015 and August 2016, while 59 percent reported a traffic decline. August represented the fourth consecutive month in which restaurant operators reported a net decline in customer traffic.

The Zero Hedge post also links to an industry commentator who wrote on Wednesday that “the current wave of (restaurant industry) bankruptcies is definitely unusual, and rivals the chain bankruptcy wave of 2009 and 2010, when several chains filed for debt protection after sales fell.”


1 Comment

  1. On a related note and something we have been told by the CBO as well a number of times over the years but no Democrat has ever paid attention to:

    Report: Obama Administration’s Labor Regs Cost Economy $80 Billion, 150,000 Jobs


    Comment by dscott — October 4, 2016 @ 6:28 am

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