financialsense.com / ANDREW ZATLIN / 07/28/2017
Heads Up: Retail Spending Momentum Turns Negative
(Note: The Vice Index is lagged: recent vice spending pullbacks are reflected in the chart above starting June.)
Consumer Spending Slowing Down
Regular readers know the Vice Index is the real way to measure the breadth of the US consumer. It factors in many disposable spending habits like alcohol, marijuana, prostitution, and gambling.
Everyone knows consumer spending (including disposable spending) is the lifeblood of the US economy. There are different but related measurements:
- Disposable Income is personal income minus taxes.
- Personal Consumption Expenditures (PCE) is disposable income minus savings, interest payments, and transfer payments. (It runs ~91.5% of Disposable Income)
- Discretionary Income is PCE minus basic essentials