Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Consumer Spending and Payrolls



• The trend of payroll growth is more important than the actual number
• Both Consumer Spending and Payroll growth is trending higher
• Concerns regarding lackluster Payroll Growth and the subsequent risk to Consumer Spending may fall into "too soon to tell" category

Part of the challenge in an instantaneous society is differentiating what seems to make sense right now and what history suggests is more likely. Conventional wisdom would have us believe that the lack of payroll growth should lead to limited upside for Consumption Expenditures, therefore placing the economic recovery at risk. We looked back to the past two recessions and found that so far, the current relationship between consumption expenditures and payroll growth is normal and trending higher (see below).

FTN Financial's Chief Economist, Chris Low suggests the trend of Employment growth is more important than the actual reading. History seems to back that up and thus far in the recovery, both Employment growth and Consumption Expenditures should be in the early stages of an uptrend. In sum, the concerns regarding forward Consumption Expenditures due to lackluster Employment growth may happen, but until the positive trend in payrolls changes, those fears may prove unfounded.

Consumer Spending and Employment Growth Trending Higher
(Shaded areas represent recessions and Presidential Terms are noted)

Source of Graph: Baseline

< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos